Comment on Basics on Options Shorting/Writing
commented on
22 Mar 2014, 04:18 PM
Vinodh, when you write options, a considerable amount of margin is blocked which takes care of such a risk. In the event that the position goes against you, additional margin gets blocked at the end of the day. If it goes in favor of you, lesser margin is blocked at the end of the day. If you don’t have sufficient funds to cover for the additional margin to be blocked the position will be squared off by our RMS desk on the following day if the position is still going against you and you haven’t brought in additional funds.