Comment on Basics on Options Shorting/Writing

DM0969 commented on 23 Mar 2014, 11:50 PM

Hi Nithin, I Want to prepare with proper funding for the Election strategy. I have quick 5 question on this example.

I buy one Union Bank future @110 + i buy one put Rs 5 of strike price Rs110… lets say there is a hung parliament and market crashes and the stock nose dives to Rs90.

Q1) Will My profitable Put position compensate my MTM loss in my futures position? i.e i dont need to provide additional margin for my MTM loses

Q2) The only thing that will shoot up will be the margin required to hold my futures?
Q3) How much time is given to top up my account with the margin required before any penalty?
Q4) How much time is given before the position gets squared off due to margin call?
Q5) Generally in such senarios by how much percentage increase in margin takes place?

Thanks,
Mahesh

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