Is it right to short the calls/puts in starting of a month or the right time is to short in the expiry week. I find it difficult to focus on words sometimes. The very first sentence of your reply answered my questions already.

• No, there’s no call/email done, instead we’ll be sending an SMS alerting you on the shortfalls in margin.
• Traders have until an option contract’s expiration date to exercise the option at its strike price.
• If it is possible to set a trigger in the trading terminal for executing option strategy, it makes life easier.
• The buyer of an option is said to be long on option.

We are in the process of getting the various regulator approvals, hopefully before the end of next month we should be able to offer this platform to our clients. Any update on the process/documentation part of how to get pledging done from getting in to getting out (when the collateral is MF’s) and vice versa. Give it a few more days, we will be putting up a process for this, till now people have transferred in, no one has withdrawn. Pledging is an overnight process, and similarly un-pledging also takes 1 day. Presently you can buy/sell any ETF, debt/liquid fund through the terminal itself.

When you place an order on Upstox, here’s what you’ll be charged:

By doing this, you will make sure to prevent any margin penalties in case your unhedged option selling position is open at the time of squaring off. Options selling is a part of Options trading where a buyer and seller of an options contract are involved. Both the parties (Option Buyer & Option Seller) have the obligation to buy or sell the underlying security on the date of expiry at the pre-determined price.

Has the margin requirement to write options also increased? The span margin calculator is showing that writing a 7000PE for november would require Rs.50,756 in margin, whereas I would have expected it to be only around 40,000. Short selling is nothing but selling a stock first and then buying it back. However you cannot short and carry forward such short positions in the Equity segment as you’d have to deliver these shares on T+2 day.

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As a group, we attempt to provide thorough details on forthcoming IPOs, Grey Market Premium, Financial Details, Risk, and firm reviews based on the DRHP and RHP. Option trading allows you to make as much money as you want. The amount of money you make from option trading in India is determined by the amount of money you put in and your experience with option trading. This is all from our side regarding option trading in India. Let us know your views about option trading in india in the comment section.

That’s how you pay the other side to take your risk. Whether you’re right about the stock price or not, the premium you pay is non-refundable. The strike price is the price at which the underlying security can be bought or sold when the option is exercised. This price is predetermined and is stated in the options contract. For example, if you buy a call option with a strike price of US$150 on Apple share, you have the right to buy Apple share at US$150 per share before the expiration date.

Suppose you want to have good profits in option trading. Here are the few option trading tips that will assist you in controlling your risks. The minimum amount you need for purchasing an Option contract would be the premium. Options can buy only in lots; the lot size changes for every stock. In the next 6 months, if the multiplex comes and the resort price hike to Rs 75lakhs, then Vinay can buy the property and can enjoy the profits.

Investors are requested to note that Stock broker is permitted to receive/pay money from/to investor through designated bank accounts only named as client bank accounts. Stock broker is also required to disclose these client bank accounts to Stock Exchange. Hence, you are requested to use following client bank accounts only for the purpose of dealings in your trading account with us. The details of these client bank accounts are also displayed by Stock Exchanges on their website under “Know/ Locate your Stock Broker”.

The value of the call option increases when the stock price increases and call option decreases in value when the stock price decreases. Many new investors often assume that they need a particular capital amount to begin investing in the stock market. However, there is no definite minimum amount required for day trading in India. There can never be a buyer without selling in any market.

Margin shortfall penalty

But, somethings are still not clear to me where overnight options writing is concerned. Here, is an example to explain the doubt in my mind. Something like what Tom Sosnoff did with Think or Swim in the States- They have really empowered thousands of traders there,if u guys can do the same here,would be awesome.

This strategy is implemented when the overall outlook of the underlying asset is neutral or rangebound and no major moves in any direction are anticipated. The maximum profit and loss are capped in this strategy, and by hedging, margin benefits can be enjoyed. The minimum capital required for selling options might be around Rs 50,000 for hedged strategies, but it is essential to have some extra margin in case of any adjustments. Also, you should remember to exit the short option positions first and then exit the buy positions.

RSI works best for options on individual stocks, as compared to indexes because stocks reflect overbought and oversold conditions more frequently than indexes. The put-call ratio measures the trading volume of put options vs call options. The changes in the put-call ratio help in understanding the sentiments.

However SPAN software which I believe runs multiple times on a day on entire portfolio should be able to catch such situation almost realtime or at end of day. So if you have shorted and liquidity dries up, it is a very tricky situation to be in, you can’t do nothing. If market is moving in your favor there is no issue, but if it goes against you the only thing you will be able to do is to take position in another contract to hedge this risk. On the expiry day, if your option is OTM, then of course it expires at 0. I had a doubt regarding options from past 2 years how it works actually ….

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Margin is marked to market daily, which means that if there is a loss you are asked to bring in those funds to your trading account by end of the day.- Extract from article. Options Buying requires a lot of how much money needed for option trading in india skills and effort from the trader. It is not easy to generate profits using Option buying. Let’s look at some of the factors and find out if it’s a good idea to start Options Buying with small capital.

To buy this options contract, you pay a premium of US$500 (US$5 x 100 stocks). With a US$500 investment, you control 100 stocks worth US$10,000. Nifty Banknifty and stocks forecast 30 December 2013 Nifty Banknifty and stocks forecast 30 December 2013 Nifty Jan. expiry future last closed at 6370 with 26 points gain. In Intraday NIFTY, future made low at 6335 while high was at 6383.

If yes, I tried the above procedure and I got the message as not available to sell the X company. You’ll be able to make more sense of the numbers then. It is better to trade in Banknifty than nifty and I can make 20% easily. I m right or my margin will be totally deducted . I have brought sbin 260 ce august 1lot @ 3.55. So,technically 3 points is not a good idea if you considering a scalp with NF options.

Alternatively, if you predict the stock or market price will fall, you should buy a put option or sell a call option. Every contract has a different expiration date, strike price and option type, so you’ll need to decide all of these factors when choosing. Trade stocks, bonds, ETFs, options, and more on 90+ international exchanges.

I guess you have checked our SPAN calculator, the values that this return for various strategies are as per the exchange. I want to initiate a calendar spread strategy in Nov 2014. Assuming at that time nifty is trading at 8015. I decided to short sell the Nov 8000 CALL at 57 and BUY 8000 call options at 160 to create a calendar spread. In this you can see that maximum gain is around is 40 but the loss is around 100.

Nicely explained about options trading in india. 1st – Regarding Strike Price – There is no restriction on buying/selling of securities having any strike price. You can use options trading as a means to diversify your trading portfolio. But you need to have a clear strategy before you trade and have a disciplined approach while trading.

What trading strategy you use, is quite a broad topic and don’t think can fit it into one answer. Absolutely, options are what are traded most by our clients. And the decay in time value will be Rs. 0.50 at the end of every trading day. Can i use this equity position as collateral & make any trade to earn a Risk Free rate of interest. If it expires in the money, 6500 call will expire at Rs 400 , this much money would be debited from you and given to the buyer of the option.

If you short using product type NRML, you can hold on till expiry. Hi, I read another comment about margins somewhere but I’m not very clear. In case market goes up and call price goes to 230. After looking at your posts/sharp response, I realized a lot and trying to develop at least some kind of your personality.