Comment on Basics on Options Shorting/Writing

Siddhant commented on 13 Jun 2016, 07:26 PM

Hi Nitin,
Sorry to keep bothering you on this. But, somethings are still not clear to me where overnight options writing is concerned. Here, is an example to explain the doubt in my mind.
Today (13-Jun) LT – 1450 Puts were trading at around Rs 26 at 3.25 PM.
Let’s say I shorted the same. An amount of Rs 7800 (300 * 26) is credited to my account at EOD….Is this correct?
At the same time I need a margin of around Rs 65000 in my account to do so…..Is this correct?
Until I square off the 1 lot that I have the next day (14-Jun), I will not be able to use the margin…..Is this correct?
On 14-Jun, I square off the option at Rs 24…..Here, Rs 7200 (300 * 24) will be Dr to my A/c freeing up the margin of Rs 65000….Is this correct?
In the bargain I net Rs 600 (Rs 7800 – Rs 7200)…..I guess this is a given.
Thanks,
Sidddhant

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