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  #1  
Old 16th October 2012, 06:40 PM
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Thumbs up Question about Selling Call or Put



Currently I allocated 10 Thousand for F & O Trade

When I am trying to sell call or put including Nifty or Stock Options It Says Your Allocated Fund is not Enough

My Broker : ICICIDIRECT

Call & Put Sellers/Writers Please Help
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  #2  
Old 17th October 2012, 06:18 AM
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You need margin as good as what you need for Futures.

Increase it to 40,000 and see you will be able to execute.

You have asked a basic question, I am guessing you planning to lose money by selling options!

Stay away from options my recommendation.
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  #3  
Old 17th October 2012, 06:22 AM
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Quote:
Originally Posted by kingtrader View Post
Currently I allocated 10 Thousand for F & O Trade

When I am trying to sell call or put including Nifty or Stock Options It Says Your Allocated Fund is not Enough

My Broker : ICICIDIRECT

Call & Put Sellers/Writers Please Help
Usually when you sell either call (CE) or put (PE) of any strike price your broker would not provide margin.

Hence you need full amount to sell any of the above.

But when you buy either one, you will get margin amount.

The percentage of margin depends on broker to broker. So you can play with.

Happy Investing!
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  #4  
Old 17th October 2012, 10:59 AM
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Originally Posted by man4urheart View Post
You have asked a basic question, I am guessing you planning to lose money by selling options!

Stay away from options my recommendation.
Unequivocally agree. Be careful.
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  #5  
Old 17th October 2012, 05:13 PM
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Originally Posted by San Yad View Post
But when you buy either one, you will get margin amount.
Is that so?

Why would the buyer get the margin?
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  #6  
Old 17th October 2012, 06:05 PM
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Originally Posted by Alchemist View Post
Is that so?

Why would the buyer get the margin?
I don't know.

Have to ask the brokers.

Happy Investing !
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  #7  
Old 19th October 2012, 10:54 AM
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Originally Posted by San Yad View Post
I don't know.

Have to ask the brokers.

Happy Investing !
I don't think buyer of an option is given any margin. The margin given by the option writer is retained by the exchanges.

Am I right?

No option traders here?
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  #8  
Old 19th October 2012, 03:42 PM
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Originally Posted by Alchemist View Post
I don't think buyer of an option is given any margin. The margin given by the option writer is retained by the exchanges.

Am I right?

No option traders here?
You are right, option buyers don't get any margin.

When selling options, the seller must provide margin to the broker in accordance with the exchange rules.
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  #9  
Old 19th October 2012, 04:01 PM
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You are correct Alchemist.

Until you close position and if you are in profit then you get the profit payment.

The biggest issue with Indian options is that the lot sizes are so huge, that cost to sell a combination requires 100,000 in margin! If one look at options traded in US, the lot sizes are kept small to lure traders!
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  #10  
Old 19th October 2012, 06:53 PM
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The margin is blocked instantly and usually debited by the broker at the end of the same day when you sell an option,this margin amount changes daily because of the movement in the underlying stock/index and the broker credits/debits the same to/from the clients account.

The seller gets the premium credited on T+1 day basis.

The margin amount is held by the broker until the seller square's off the position or expiration of the contract,after which the broker credits the amount back net of any profit/loss.
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