When my short option positions make a loss during a day, I see that unrealized profit reflects that with negative value and my available margin reduces by roughly similar amount. However when I see my short option position making a profit during a day, unrealized profit does not show +ve value and the available margin does not increase. I am talking about normal/regular short option positions and not intraday/MIS positions.
Is the change in available margin due to unrealized loss done at broker’s discretion, or that is also blocked as per exchange/SEBI and broker needs to provide this also as part of margin to the exchange?
unrealized profits are not considered as part of available margins but unrealized losses are considered in available margin. This is as per our RMS policy.
However, this is applicable for Futures and Intraday equity trades. It is not applicable for Options. For option positions, unrealized profits or losses don’t affect the available margin. You would have likely seen it change due to a change in SPAN/Exposure.
@nap As part of RMS policy only unrealised losses will be considered for margin utilization & Unrealised profits are not considered for margin utilization. The reason is profits can turn into losses any time of the day. If the positions are taken on basis of unrealised profit need to be reduced even exchanges considered profits only on T+1 day basis & losses on the same day.
Is there anyway to predict margin required if short option position goes the other way. For example: margin calculator shows that I need a margin of about 85000₹ to sell Nifty10000 CE strike (Nifty at 9250). Should this turn ATM in say 4-5 trading days, what would be the margin required to keep my position open?
