Silly question, but if I buy long-dated options that are immediately far in the money, do I get any funds/margin in the mean time, or is everything settled only at expiry?
For example, if I buy call options for Nifty 20k strike price for Dec 2024 for say Rs 2000, and the market immediately shoots up to 25000+, and the price of the options is Rs 10000 plus now, do I get any intermittent benefit in terms of funds/margins, or will nothing happen till Dec 2024?
No, if you are buying options then you will not get the funds which is technically known as MTM( mark to market )
But, if you close your position at the same price then the amount including the profit will be credited to your account immediately but if you don’t close till the expiry then whatever is the settlement price, at that price the amount will be credited on the expiry day
Learn more about mtm here
1 Like