Hi I read somewhere and it is my understanding that buying options is not a margin trade since you have no compulsion to buy/sell the underlying equity. And if the option is in the money, the exchange can use the investors cash to do a buy and sell. Can somebody explain me whether this line of reasoning is right ?
Also if the flow of buying and executing an option does not involve margin, would it not be permissible under LRS ?
Disclaimer I am pretty new to this topic