In developed markets, brokers provide a facility to buy or sell the spreads directly as a product. For example if I want to trade a ATM straddle on Nifty my cost is 95 for CE, 95 for PE totalling 190. Brokers can productize this and make a ATM straddle available at 190. In this way, I don’t have the trouble of execution risk.
Has this got to do something with market making ?
Brokers in India can’t offer any contracts to trade on their own, if it has to be done, it has to be done through the exchanges. Exchanges only offer calendar spreads as a contract to trade on presently, and hopefully not in the very distant future - exchanges will allow brokerages like in the US to start quoting various option spreads.
It is basically the job of market makers .India is not a well advance market to trade the Hybrid Strategies because of very low retail investor penetration in F&O segment.The only active F&O action we could see is in Nifty index .
Some strict rules regarding margins by SEBI also does not encourage us to trade hybrid strategies.
Well, that’s why India is India. Don’t expect anything advanced in our country for more 30 years. It seems we are doomed to hell.
Why can’t I buy calendar spreads on Pi (using options, not using futures)? I have to buy it as 2 different legs.
Also, why SPAN calculator shows margins as high as 40K on calendar spreads (using options)? My max risk is only 4 to 5K.
why we can not have this as tool in kite, and tool can show real time profit and loss on graph
I found one very good website to plot PayOff graph
http://www.stocksrin.com/nifty_LongCall_payoff.html