Comment on Basics on Options Shorting/Writing

Dk0046 commented on 03 Sep 2015, 12:04 AM

Nithin,
I have some basic questions on Options writing:
1. Is M2M calculated on daily basis on options writing?
2. How is F&O obligation calculated on options writing?

Would help if you can explain with an example. Let me take a hypothetical case:
1. I write an option worth 100 Rs on Day 1, it closes at 105
2. On day 2 it closes at 110
3. On day 3 it closes at 90
4. On day 4 I square off at 80

Can you tell me what happens to M2M and F&O obligation on each day?
Thanks

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