what if i squared off my position immedietely in after receiving the premium for short entry. what happens to my margin and premium. they will be deduct my premium and margin i have paid.
To square-off your short position you’ll have to buy it back, so amount equal to premium * lot size will be debited from your account. While the margins blocked for taking short position will be released back in your account.
If you are new to Options trading, would suggest you read this module on Varsity;
@ShubhS9 At the time of OPTION SELLING, margin would have been blocked which will be around 40% of
total Contract amount depending days left out for expiry.
To square off the sold position,you say that still we have to have 100% Contract amount in our account which appears to be non-logical…If that full contract size amount is blocked,when it will be released back to our account
as we do not physically buy it.
Thanks in advance…
Let me give an example.
Expiry: 29 July 2021
NIFTY 16000 CE
Premium on 1 July 2021: Rs 78
Lot size: 50
Contract size: 50x16000=8,00,000 Rs.
When you sell:
Premium recieved: 50x78=3900 Rs.
Margin blocked: Rs 80,000 (approx)
When you square-off (buy) immediately, assuming premium remains same:
Premium payable: 50x78=3900 Rs.
Margin unblocked: Rs 80,000
Cost of the transaction:
Brokerage: 20+20+GST
STT, Exchange charges, Sebi charges, Stamp duty.
So, in short, you don’t gain if you square off immediately but will incur approx Rs 54 in charges.
@alwaysshri …The question is not regarding profit or loss.The doubt is whether we have to have the full contract size amount (in your example Rs.8 Lacs)in our account to square off the sold position) i.e at the time of entering buy back order.
You don’t need contract value, only amount equal to premium * lot size 
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No way , u don’t need to have