I have a doubt regarding the physical settlement in case of Bear put or Bull call spread. If I take a long 10300 PE position and short 10100 PE position in NIFTY, so do I have to take physical settlement in this combined position irrespective of the spot price on expiry.
Nifty and Bank Nifty Options are cash settled, no physical delivery.
2 Likes
and what about the above same scenario but replace index with any equity derivative?
Read this.
1 Like
Thank you. This helps !
I want to Sell 1 Lot of Nifty August Futures and Buy 1 Lot of Nifty July Futures. As per Zerodhaâs margin calculator the total margin required is Rs 19413. Assuming my account has Rs 50000 funds and the margin for an single leg is Rs 145000. I have the following queries
- How should I execute this order, should I place both the Buy & Sell order at the same time to get the margin benefit, During market hours it is not possible as it will show up as insufficient margin or
- Should I keep sufficient actual margin of Rs 290000 covering both legs and when both contracts gets executed the actual margin used of Rs 19413 will be used up and Rs 270500 margin will be freed up? or should I keep 1-side full margin of Rs 145000 and either buy / sell first followed by sell / buy
- What happens to the margin if i close one leg and carry the other leg
- To get margin benefit which contract should i execute first - The sell contract or the buy contract
Please see attached screenshot of the potential trade
Doesnât matter which leg you execute first, you will require full margin to execute that leg, On this strategy you will get margin benefit only after orders for both legs are executed.
1 Like
Hello,
Will this be applied to MIS orders as well? If yes will there be extra leverage? If no then why and any chance to get this implemented soon?
You will get margin benefit for MIS orders as well. Margin requirement for MIS orders is only 40% of NRML margin.
looks like the new margin benefit is only for Normal not MIS. idid today MIS using buy and sell options MIS didnât gave any leverage
1 Like
There is no leverage for Buying options, as for Short positions, If NRML margin requirement is 100k, MIS requirement is only 40k.
For hedged positions, Assuming you Bought 10400 Call and Shorted 10500 Call; NRML margin for this trade will be 15,486. At 40%, MIS margin requirement will be 6195 + cost of buying Call (50 Premium * 75 Lot Size) = 3750.
Thanks,
I did the trade yesterday , i didnât get the the leverage as specified by you âŚTicket #20200624864988⌠can you see if there is some issue i have specified trade logs as wellâŚ
In MIS, benefit will come only on span, not on exposure. 35% of span but 100% of exposure.
@nithin This is great in theory. Practically speaking a lot of times I am not able to take this margin benefit because of Zerodhaâs restrictions on buying OTM options.
This is really a big problem and Orbis account canât be a solution to this as you are asking user to move from one problem to another where they canât buy MFs or equity and put them up for collateral.
This issue has been pending for a long time now and has become a real buzz-killer post these new margin rules. Request you to please prioritise a solution which solves this problem without asking user to compromise on things like investing and collateral.
4 Likes
Margine calculator for below hedging was showing just 23000 margine requirements but when Tried to execute itâs was showing more than 1 Lakh. Why its having so much difference.
BAJFINANCE NOV Fut - Long
BAJFINANCE Nov 3300 PE - Long.
Calculator is working fine, you must have entered wrong values, below is the margin requirment for your trade, this doesnât include premium you have to pay for taking Long position in PE, you will have to add that amount to this margin.
So to execute above hedge trade how much Total margine required?
The Total Margin shown above of 71911 plus amount of cash needed to take long position in 3300 PE (Premium * Lot Size).
You can also add these scrips to Basket Order on Kite Web, which will show you total margin requirement (displayed below in green). If you add Long Option position first, you will also get margin benefit beforehand.
1 Like
Can Zerodha keep an option like checkbox or something like that enabling which itâll show âTotal Required Amount (margin + premium of long option)â. Lots of clients are getting misled by watching âFinal marginâ amount in Basket Order calculation window.
@Siva, the margin required feature hasnât been working properly today, the margin changes from something like 11k to sometimes 30L in an instantâŚcanât get an accurate pictureâŚ