Comment on Basics on Options Shorting/Writing
commented on
26 Mar 2014, 03:59 PM
Hari,
The value of your buy option position doesn’t really get added to your account balance, and hence it can’t be used for MTM of the short option where you are losing money. But as an RMS team, we are usually considerate with such hedged positions, and give extra time for you to bring in the MTM losses. But if the margin reduces by the minimum required (SPAN) as per the exchange on your short option, there would be an exchange penalty levied.