I have been paper trading (option seller) “Expiry” OTM on nifty with hedging for a year and have been profitable; and want to trade small amount with usually required 35,000 margin virtually . Can you tell me
How much money I have to keep in my account ?
When and How the cash settlement will occur (with time stamp) ?
Margins required for hedged positions are low. If you look at the below screenshot, the margin required to take this trade is around 26k and once both orders are executed, the final margin blocked will be around 22k.
Though, there are couple of things you need to keep in mind. Margins are dynamic and change according to changes in price and volatility and margins can increase.
Also, for if your short option position is in losses, this gets debited activity from your account, increasing the margin requirement.
So ideally it is best to keep 10% to 15% buffer margin for such scenarios.
Contracts are settled after market close in expiry day. Any profits you’re making will be available for trading from next trading day.
