when i buy 1 lot of USD INT OCT 15 FUTURES -- margin need is 1608
when i simply add 1 LONG PUT of same lot at strike price 65.5 , margin requirement for this combo is just 928 total .
1) why & how did this happen ?
2) both show lot size 1 B means even options also i get a lot of 1000 dollars ?
3) does the amount of 928 also include premium of put option ?
Looks like you are just getting started on F&O. Will advise you to go through Varsity.
1. Futures position have unlimited risk, and hence a margin in blocked.
When buying options, the maximum u can loose is the premium, and hence only the premium required to get into the position.
When shorting options, again unlimted risk, and hece margin.
In the above example, since you bought future and hedged it by buying put options, the risk of your portfolio drops dramatically. Hence the margin required to take the position also drops significantly.
2. Yes 1 means 1000 dollars when trading currency
3. No it doesn't.
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