Comment on Cover Orders - For Higher Leverage

Krish commented on 28 Jan 2015, 08:14 PM

Hi,

Can you explain how is CO giving more leverage than MIS in the below example in Option trading.

I have 12 lac in my account and I want to play intraday(either MIS or CO) on RELCAPITAL on the expiry i.e. 29th Jan.
1. in case of MIS : Using SPAN calculator I am allowed to play around 50000 quantity max for MIS(considering 40% of the margin requirement)
2. in case of CO: The same quantity I am getting using the BO & CO calculator

So here I am get to play the same amount in MIS and CO then how am I getting more leverage in CO here

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