Query regarding Options

F&O
1

Can somebody tell me what happens in below scenario-
I have purchased 1 lot of call option last friday @ ₹1
Now if i purchase same call with same strike tomorrow @₹0.30 under NRML and sell itself tomorrow @₹0.50

So 1) will this buying and selling same day under NRML be still considered Intraday, even thought it waant bought under intraday mode.
2) also selling this 2nd lot will square off which position, the lot which was purchased the same day @₹0.30 or the lot purchased on friday @₹1

Thanks

2

In F&O there is no concept of intraday and delivery. So it is always first in first out (FIFO). What you bought last friday will be considered sold when you sell it.

Btw, it doesn’t really matter which one got sold since it is both the same (taxation etc work similarly for all F&O - intraday/delivery, unlike in equity)

3

If there is no intraday, why do we get two options to select from that is Nrml and MIS when buying/selling options?

4

NO actually my aim was that since the option bought on friday was for ₹1 and today it is worth 0.30 so i wanted to take another same position at 0.30 hoping even if it goes 0.50 i can book profit on that 2nd lot and still wait for the first lot price to come up, so just in case it doesnt come up, atleast i have booked some profit on 2nd lot in order to reduce thr overall loss.

5

MIS gives you more leverage. It’s useful for traders who want to square off their position in the same session and at the same time want to trade with lesser margin than that of NRML.

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6

Hey,

I don’t think we can use the margin leverage for the Options. Correct me If I am wrong please

7

If you bought same strike price 1 lot @ 1 rs today & 1 lot tomorrow @ .3 rs. then your price will get average. Now you hold 2 lots @ 1.3 rs so obviously 1 lot price is averaged to .65 rs from earlier price of 1 rs.

Now you sell off (square off) 1 lot or 2 lot, your updated buying price is .65 rs. per lot.

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8

Ohhh. Frankly, I have never used MIS order for Options. However, in the Zerodha margin calculator page, in the BO&CO section, I can see that Product type Options is present for NFO Segment which is showing some leverage factor for Nifty Options…

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9

Yeah I agree. Heard, 1.7 X is the margin for NIFTY I suppose. But Weekly Bank Nifty options doesn’t have one.

You could still very well place orders with MIS and it’s just that the position has to be squared off on the same day itself

10

zerodha doesnt provides much leverage for selling options. But surely many other brokers do provide high leverage on options buying & writing, as well as CNC trades too.

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