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.
2 Likes
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-reddy 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.
1 Like
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
1 Like
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.
For MIS we block 20% SPAN and 100% Exposure margin.
@ShubhS9 so while SEBI circular says minimum 25% of SPAN+Exposure , Zerodha is collecting 20% of SPAN and 100% of Exposure, is this right?
25% is minimum which has to be collected, depending on RMS policy, brokers can block more as well.
Assuming, Zerodha maintains the same RMS policy as is being followed now, rough back of the envelope calculation will be as follows:
Currently approximately 6L required to trade 9 lots each of a BankNifty straddle for intraday.
8L required to trade the same 9 lots each from March’ 21.
11L required to trade the same 9 lots each from June’ 21.
15L required to trade the same 9 lots each from Sep’ 21.
In the mean time best wishes to Wisdom to win the legal case they have filed against SEBI in the HC.