any further discussion happening in sebi to bring risk based margin system for hedged trading
1)roi will improve significantly
2)people will stop buying far otm worthless option
3)new breed of traders can began and history can be written
4)as margin will increase for intraday trade this will increase impact cost
5)pls make our voices heard to sebi (brokers pls definitely you will have advantage too in terms of revenue)
@siva really is irritable to trade in nifty , i try to do a option strategy in nifty as bear call spread 11700 sell and 11800 buy but what use , the system is rejected , i cannot get any nifty trade in zerodha , even i am trading with capital of 50 L you guys are not taking a serious about this OI problem , i am really forced to look other broker
even i am paying on different trade as commission to zeroda itself 30k every month , but you are not helping us …
you are giving permission to trade very close to the LTP , its not possible fo me , i am a very conservative option trader ,you are zipping the strike price , better ban nifty trading from zerodha , i really fedup ,
Dont tell to open in ORBIS , I lost lot of oppourtunity to trade in nifty option , because of your OI and shut
Can you sell first and then can place buy order as same as sell quantity.
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ok i will try
@siva, Nifty has a freeze quantity limit of 7500. If someone has to buy 30000 call option in nifty. How to do it in one click?
You can do so with help of Basket Order, where you can create 4 orders of 7500 Quantity each and execute, read this post to know more about Basket Orders.
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Shiva, pls help me to understand the margin requirement. I want to execute Bfly on stock on last friday ( today) before monthly expiry , I have following questions—
- Whether physical settlement will affect me ( I have complete hedged position) if I donot cover it before expiry.?
- For naked sale probably attracts extra margin during last week of expiry , whether hedged position like Bfly also attracts extra margin during last week of expiry.
Yeah, more margins are still required.
Yes, it requires.
@siva there are no additional margins on nifty options when expiry is near, right ?
Suppose I want to initiate a bear call spread for 12000CE and 12100CE for next week, I will have to buy the long option first, and then immediately sell the short option to get margin benefit. So do I have to do this using 2 different windows ? If market is wild, I might see a price fluctuation & hence the slippage even within a second. Can I use basked order to do this ? How does that get executed ? First buy order, below it sell order and implementation in same order or this could be risky ?
@shubh
Index F&O are cash settled, so there are no additional margin requirements during expiry.
If you take Long position first, you get margin benefit beforehand.
You can use Basket Order, the orders in Basket are sent in the sequence you have placed them in. Eg. if you have placed Buy order first and then Sell order, Buy order is sent for execution first simultaneously followed by Sell order.
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Yes, once your both orders are executed you will get margin benefit.
Hi, is the problem of buying deep OTM resolved in zerodha? Because only that way, I think I can avail margin benefit for option spreads. First buy and then sell options
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Hi Nitin,
Currently you are offering a Short- ATM straddle i.e. 30300 CE + 30300PE @ 55k/Lot, approximately.
As this is a hedged strategy, can I understand this margin amount will continue to remain same and will NOT be impacted by the SEBI circular which is more targeted for those shorting naked options.
Thanks!
Srinivas I
The 55k/lot which you have quoted is Intraday margin, this will increase in a phased manner starting December and from September 2021, you will have to pay full SPAN + Exposure margin which is about 167k as there will be no leverage offered. Though you will continue to get margin benefits for hedged positions, there is no change in this rule.
But you guys said that till march 21 margin will remain almost same …the margin for this was around 40k
Thanks for the quick revert.
essentially you are saying two things here…
First you say “margin will be 167k from Sept’ 21” and then you say “you will continue to get margin benefits for hedged positions” sorry I did not follow, could you elaborate.
when this is clearly a straddle and when margin benefits will CONTINUE for hedged positions why & how will margin go up from 55 to 167k,
appreciate your response, thanks!!
For Short Straddle, overnight (NRML) margin requirement without any benefits is around 300k (red box), as this is a hedged position, you get a margin benefit of 133k, bringing the total margin down to 167k.
As I mentioned above, the 55k margin requirement is for intraday (MIS, CO), from September 2021 there will be no more leverage offered in F&O segment and margin required for MIS, CO will be same as NRML.
Though this is seriously disappointing, thanks for the clarity.
So could we understand that till Sept’ 21, you will continue to provide this @ 55k. Thanks!!
No, this will increase in phased manner.
- Dec 2020 to Feb 2021 — minimum 25% of SPAN+Exposure margin has to be collected, maximum leverage offered can be 4x.
- March 2021 to May 2021 — minimum 50% of SPAN + Exposure margin has to be collected, maximum leverage offered can be 2x.
- June 2021 to Aug 2021 — minimum 75% of SPAN + Exposure margin has to be collected, maximum leverage offered can be 1.33x.
- From Sept 2021 — 100% SPAN + Exposure has to be blocked, means there will no leverage offered.