I have an essentially risk free trade in RIL through options. I sold 1960 PE at 59 and bought a 1950 PE at 48. This essentially made my trade risk free with limited profits.
My question is will the new margin rules still require me to put up delivery margins on this trade?
You can check the margin required by adding those positions on kite basket.
Hi Siva
Thank you for the reply but my question was something else. I guess I was not clear. I will try to explain again.
So I have already taken the above two positions. The positions are structured in such a way that when you draw a payoff graph, you will notice that there is a 0% chance of loss. Its a risk free position as of now.
Usually when we have stock options, we are required to bring in delivery margins in the last week of the trade as stock options are no more cash settled and require physical delivery.
So my question with the given background would be, in a case such as mine where I am in a no loss situation, would I still be required to bring in the delivery margin in the last week of the month?
yes bro you will need margin for that i also had a similar query the margin for the naked position doubles but the margin benefit remains intact
lets say 1.4l to sell pe
and with margin benefit 30k
taht is margin benefit of 1.1l
in last 2 days 1.4l will double that is 2.8L and youll get margin benefit of 1.1l
that is youll need 1.7L
Even if your position is hedged, the margin will increase to twice of normal SPAN + Exposure margin on last two days of expiry, though you will continue to get margin benefit. Have answered this in detail here.
Yeah, it is required but only for last 2 days of expiry and not entire week.
@siva Any idea how the volumes have been (increasing/decreasing) since the leverage rule was implemented ?
Nithin shared statistics about that in another thread -