Does the option writing with SL(stop loss) decrease the margin required than a regular option writing
Though your risk here is defined, your margin requirement doesn’t decrease when you use SL.
Instead you can Buy OTM Option to hedge your short position, this will give you substantial margin benefit, you can use Margin Calculator to know more.
Dear Shubhamji, First of all Thank you.
I have written OTM Put, Asianpaint Sep 1780 PE at Rs.29, and that went deep OTM as of now;
The option has become illiquid with bid to offer price difference of Rs.4-5, so i am unable to
square it off with a limit order. Though I am in profit as of now, and the option is likely to
expire in OTM, my margin is stuck; what is the best possible thing to do to get any margin
benefit?
(I also have written a Asianpaint OTM Sep CE , which is at present in ITM, and utilised
the usual margin benefit.)
MRV