We recommend reading this chapter on Varsity to learn more and understand the concepts in-depth.
Key takeaways from this chapter
- Neither option buying nor selling entails mark to market; M2M is only for futures
- Margins charged for option selling is a function of both price movement and volatility
- As volatility increases, so does the option premium
- Option positions closed before expiry can be generalized to the Difference between buying and selling price of premium multiplied by lot size
- The option positions held to expiry are physically settled
Whether option chain analysis is applicable for currency trading also? Kindly give your views.