Comment on Online pledging of stocks for trading F&O
commented on
02 Jan 2017, 06:23 PM
When you buy options, there’s an outflow of cash. Money moves from the buyer of the option to the writer of the option. Since margins raised from collaterals is not ‘cash equivalent’, you can’t buy options with pledged stock. However when you write options, only margins get blocked, there’s no outflow of cash.
If you already have a positions as indicated in (b), there’s no requirement of cash.