Comment on ZT-Spread Orders

RainMaker commented on 13 Oct 2013, 06:53 AM

Zerodha,

CE 5800 BUY 353
CE 5900 SELL 269

Margin required for the spread order is 29000 approx. after execution.

i) When actual order is placed it ask for something like 99000 approx. as a spread order. (Margin for short + cost of Buy)

ii) When two order are placed separately Short with margin about 64000 and buy with 35000 ( sell premium + additional 8000)approx total margin required approx 72000.

I dont find any benifit in spread order to start with expcept for saving 20/ on brokerage or sometime you may refer to a sudden sharp change in underlying. Or we don’t get the margin benifit in the second case and all the 72000 approx is required.

In any case loss is limited. Am i missing some thing. ?

Would not it be prudent that for spread orders, you should allow orders to be placed with reduced margins instead of enhanced requirement ?

NB: Above calculation are for 2 lots each.
Please ignore that there is no juice left in the spread.

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