Hello Team, In Zerodha, I am doing a monthly iron condor and collecting the premium 45days before the expiry & while placing the order. Consider, I have collected 10,000 Rupees as premium and the amount will come into my account. But if I close the position after 25 days with a profit of 2500 Rupees, I guess they will take 7500 Rupees from my account (excluding charges for example sake). Is my understanding correct?
Consider another scenario, instead of profit, I am in loss of 2500 Rupees, then they will take our 2500+10000=12500 in total, is this correct?
Right. Whenever you’re closing short option position, ie. buy the option back, you will have to pay the premium which will be deducted from your Zerodha account.
The difference between your selling price and buying price will be your P&L.