Comment on SPAN Calculator

Nithin Kamath commented on 24 Nov 2013, 02:05 AM

Abhinay,

When you trade options there are 2 ways, either you buy or go long options in which case there is no concept called margin. You buy calls if you are bullish and buy puts if you are bearish, in both the cases you need the entire premium to buy. So if Nifty 6000 calls are trading at Rs 100, you need Rs 5000 in your account to buy.

The other thing you can do with options is to short or write or sell options, margin is required only in this case as is the risk in this case like futures is unlimited. So if you are adding sell option position on the SPAN calculator you can see the margin required.

Hope this clarifies,

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