I am developing a strategy so need some guidance.
Assume: I have 10 lac capital and I short an ATM banknifty call option at a premium of 200 and one lot costs 40,000.
So I end up shorting 25 lots (500 quantity) which amounts to 10 lac capital.
How much loss should I incur as percentage of the total capital before there is a margin call?
The moment the free cash in your account falls below the required margin, you will get a margin call.
I.e Assume, you have Rs 10 lacs in your trading account and you take a position in BNF worth 10 lac. Now the position goes against you and the margins are revised and is now 10.5 lacs. Since, you had only 10 lacs in your account, you will get a margin call.