At Zerodha,
If you are buying options, there is no difference other than that all MIS is squared off at 3.20pm
If you are shorting/writing options, with MIS you get additional leverage (40% of what is required for NRML). Again all MIS squared off at 3.20pm.
Take a contract for example. You can buy in NRML and sell in MIS and hold both the contracts until the evening without cancellation, which is otherwise not possible (the buy and sell cancel each other leaving you with no open positions)
I don’t know whether anyone would do such a thing! But its possible!
I have tested this scenario with forex trading (demo account). I do this to lock in my profits. Say I buy euro-usd at 1.11111, it moves up to 1.11222. I then sell (short) a new lot without closing my first one. So now my profit is locked in. Wherever I choose to close my positions (both together) I am guaranteed to make a profit of 0.00111 points. or I can close my buy/sell position when in profit and open another buy/sell position at same point increasing my profit margin.
So there you have it. A strategy for taking opposite positions using MIS and normal. Could be used with FnO or equity, but could be high risk, as it makes you drop guard and not do proper research and also, it will limit your profit, if at all you make any.
I just realized I bumped a very old thread. I came to this topic searching for information on shorting stocks. So… I thought I should just mention this if others find it non-relevant or waste of time.