If i write OTM option how is the margin adjusted if premium increases or when decreases? E.g. 8000PE July25 nifty short @ 67 when nifty was 8400. Now its 137. Nifty @8130. And what happens to the next month short put or short call option at the time time of current month expiry date? E.g. Nifty July 25 8000PE and 9000CE short. P.S: I’m paper trading right now.
Have you checked the Zerodha SPAN calculator? you can calculate option writing margins individually or combined without having to take positions.
The option writing margin proportionately increases as and when the option keeps going in the money. So if if you short at 70 and not it is 140, the option margin also would have gone up by around 70 points or 70 x 25 = Rs 1750.
The longer the time duration to expiry, the more the option premium value, and also the option writing margin requirement. So if you are trying to rollover a position on expiry day, the margin required to rollover might be higher than what is currently required.
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