I understand the reasons behind SEBI cranking up the margin requirements but the flip side is returns on hedged strategies that include option writing are just going down and almost skewing the risk to reward ratio. Question is, even for hedged and covered strategies the margin requirement is ridiculous. Compared to the US markets where margin requirements are “logical”, how are we Indian traders who write options going to make any decent return on our capital and risk ?
I’ve almost reached a point where I am considering trading US F&O markets just for the margin requirements but also because those markets offer more opportunities for hedged strategies to generate decent returns.
Is anyone else feeling the heat of reduced returns due to margin requirements ? Isn’t it suicidal to hence consider strategies that rely on buying options ?
I’m looking forward to connecting with like minded people and brain-storm some sort of hedging strategies that can still generate attractive returns .