Comment on Zerodha - Margin Policies

Nithin Kamath commented on 02 Apr 2013, 09:18 AM

Chandra,

Presently Nifty 5800 puts are 96 and 5500 puts at 15. To short 5500 put margin required is around 18k, but the combined margin required to short 5500 put and buying 5800 puts is only around 13k.

So you get a margin benefit of 5k on option writing + 5k on buying the 5800 puts, together a benefit of almost 10k.

We offer you a tool called (SPAN calculator)[http://www.zerodha.com/z-connect/blog/view/span-calculator] which is unique and will help you to know the margin benefits even before taking a trade.

You can place orders for both, but the margin benefit you will get only after the position is executed. So if you place an order to short the puts, you will need 18k, but as soon as you buy 5500 puts, it will drop immediately.

So yes place a limit order to buy 5800 puts at 90 and sell 5500 at 15, but you will need separate margins for this, once both are executed your margin requirement drops..

Hopefully this helps..

View the full comment thread »