Comment on Basics on Options Shorting/Writing
There is not really m2m as such that happens when you short options. When the market moves against you, the margin required keeps going up significantly. So in a sense it is m2m of the margin that is blocked for writing options.
Assume margin to write calls is 10,000 when price is Rs 100. (lot size 100)
Goes to 105, market moves against you, the new margin required goes upto 10500 + (500 loss, which gets covered in the margin blocked).
Goes to 110, new margin required 11000
Goes to 90, margin drops to 9000
Goes to 80, margin drops to 8000