Here is my doubt, if i have 50K and i decide to buy a Call option first and then short Future of Bank nifty, Making the required margin and final margin around 30K. Do I have to add the whole amount required for trading in futures in order to Carry forward or it’ll be okay, till I’m holding that option too??
Anyone experience please share insights…
Isn’t buying a call option and shorting a futures contract on the same underlying asset a contradictory or offsetting strategy?
In this case, you don’t need to maintain the full SPAN + Exposure that is required for naked shorting of the futures contract. Only the final margin (30k taking the above example) will be required.
However, it’s best to have some buffer margin for changes in margin due to volatility or mark-to-market losses in the case of futures. Since futures contracts are marked-to-market, any profit or loss you make here is credited or debited from your account on the same day. You can learn more about M2M here:
Thanks brother !!
Basically I’m doing that to reduce the margin which is required for shorting Future.
so I’ll be buying a Far OTM CE and I’ll short Future, (here my view is downside). Understood ?