Comment on Basics on Options Shorting/Writing

Venu commented on 02 Jan 2017, 03:28 PM

1. Yes, you can take positions with 100% margins in the form of collateral but interest will get charged on any shortfall in cash. The cash-collateral ratio for margins for overnight position should be 50:50. So if you take a position for Rs.1 lac with only collateral, interest will get charged on Rs.50,000/-
2. When you write options, there’s no MTM. When the option moves against you, eod margins will increase. You’ll either have to bring in the margins (by way of cash or collateral), or the position is liable to be closed.
3. Didn’t understand this question.
4. You’ll have to pledge the shares.

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