Comment on Basics on Options Shorting/Writing

Nithin Kamath commented on 17 Feb 2015, 03:52 PM

Gurmeet,

1. The margin required to write an option changes with every contract, and it is not as simple as 8% of contract value. We have built a SPAN calculator that shows the margin requirements even before getting into a trade. Check this: https://zerodha.com/margin-calculator/SPAN/ . Btw this margin requirement is as per the exchange. For example 8900 calls shorting requires around 15k, which is much lesser than 8%.

2. There is nothing like a trigger price is decided in advance. At the end of every day, if the market moves against you the margin requirement for that option automatically goes up, and similarly if market moves in your favor, the margin requirement drops. It is not about Zerodha or ICICI, these things are determined by the exchange.

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