Can we sell an OPTION first( Whether it is Call or Put) then Buy it? Will it be a MIS order then?

General
1

If somebody anticipates that any stock will go down on result announcement…but feels that rather than going for buy on ‘PUT’ option, he/she decided to go for selling of ‘CALL’ option first and then buy at the lower price…

does such order feasible in OPTION trading…If yes how…Will it be a MIS order if Placing Sell order first and then buy.

2

Yes, you can do that..selling first and buying later. You yourself have to choose the order type NRML or MIS. if you choose MIS, it will get squared off on the same day. and if it is NRML you are free to keep it till expiry. But Beware, option selling carries unlimited risk. for more details you read Option Theory module of Zerodha. 

1 Like
3

Thanks for the clarification…
If my Sell order(NRML) for ‘Option Selling’ executed at the premium of 110 ( Nifty 8200 CALL option)…
How do i close the contract If premium goes below the 110…say around 100…
Will it be a simply buy CALL around 100 for Nifty 8200 CALL option

4

Yes…a simple buy order, of course NRML as you sold the same. And you will bagged a difference of (Rs.10 x Lot size)-(brokerage+taxes)

5

how much margin required