Option selling MIS margin need to increase

#1

Hai,
Zerodha is providing very low MIS margin for option writing when comparing many brokers . zerodha is providing only 2.5 x this is very low in industry , small option writer cannot do anything in zerodha platform, atlease zerodha want to provide 4 x , most of the broker is giving 4x

zerodha will not come any decision quickly, pledging mutual fund is 3 years back nitin told its available soon still now its availing ,lot of no need features are introducing first , what we need zerodha will never implement i dont know guys

5 paisa introduced Option X scheme MIS 10X

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#2

Looks interesting for option sellers, cannot find more info on this Option X scheme on their website. Just wondering whats the catch, range restriction or anything like that? anyone used this facility yet?

#3

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#4

Under which menu is this information available ?

#5

https://www.5paisa.com/optionx

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#6

Got it, Also found the catch.

  • Maintain a minimum ledger balance of Rs 10 lakh.

But this looks more like a scheme to make the rich richer and exploit the poor option buyers.

#7

welcome

#8

you can pledge liquid fund here thats a big advantage

#9

This is for intraday only so during the day there won’t be much time decay to capture unless it is an expiry day. Giving my personal view on the leverage front.

  1. Leverage itself is a double edged sword, on top of that these many times is a call for destruction of capital.
  2. Excessive leverage is not only a risky affair for user but for entire broker and other clients of those basically to entire ecosystem, it can have structural impact.
  3. Considering the actions initiated by SEBI on margins thing it may also soon curb on extra leverages provided during the day on fno as fno contracts are already leveraged.
  4. Never built your strategies based on leverage alone. Anyone can withdraw those anytime.

Now coming to zerodha, we perceive excessive leverage is not good for ecosystem hence we may not consider to increase leverages anytime soon.

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#10

siva i agreed , but i have more capital like 50 l i am not getting any thing when i am not trading , you are not allowed to pledge liquid fund this is the one to forced to see another broker

#11

We are working on our new DP process, once this is live we will allow to pledge MFs. This can take 2 months more. Can use liquid bees for now and pledge them to trade.

#12

i traded with zerodha till last December … after the increase in fno margins , i completely moved out of zerodha …

if someone has a working strategy thoroughly tested in the markets , then leverage brokers are the way to go …
flip side is most leverage brokers who give 15X and above charge brokerage based on per lot basis which will not work out for many OTM option selling strategies ( 10rs to 30rs per lot ) …
but if we are trading with 20L capital , we can get a decent deal from them…

anyway if someone using 2X to 4X leverage moves to 10X , it frees up lots of capital :slight_smile:

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