@velu , could you please check if there is any margin difference for Nifty credit spreads like short 10900ce & buy 11100ce of Jan or Feb options.
i doubt he does credit or debit spreads … anyway i will check it with him
I just realized that margin required for doing a 10800 CE and 10800 PE short is much higher now. Even if you have a cover with 11000 CE buy and 10600 PE buy.
Game over for retail people with 1.2 lac in the account
Or a different way to look at it is, learn the market well and play directional trades 
this is huge set back for option writers. with 5 lakh capital, i was earlier able to easily do 5 lots of overnight iron condor. but after this policy change I am able to do only 4 lots.
this is really bad for us. zerodha is more for long term investors. intraday traders depend on margin from brokers. but with this change in policy has left us to search for brokers who provide better margin.
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After this recent change in margin requirement. I am looking for a broker which accepts mutual funds as collateral for providing margin for option writing.
Does zerodha offer this facility? If not, Can any1 suggest some other brokers for this.
Dear @Praveen_Chikkappaiah,
All broker have same overnight position margin.
TRY to change/optimize your strategy with your capital as 5lakh still not bad.
I am a beginner. I want to experiment with iron condor for some more time. so don’t want to try any other strategy for now.
I am sorry I am creating lot of posts about the same thing. I am newbie with 1.2 lac capital I used to make some money on some occasions and lose a lot at other times.
Now that I have started understanding some intricacies of how this works, SEBI does this! Seriously?
1 lac 61 thousand for a strategy which is limited profit limited loss?
Google says, The butterfly spread is a neutral strategy that is a combination of a bull spread and a bear spread. It is a limited profit, limited risk options strategy!!
So, what the heck is the extra 1,50,000 for? If I have less margin, just don’t allow me to close the long position without squaring off my short position! Simple! No?
Considering that trading is a business and so many traders depend on this for their livelihood, can the traders sue SEBI for unfair business practices?
@nithin Sir do you think it makes sense?
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What’s unfair about it?
Considering volatility of all the upcoming events and the appetite to gamble in india on derivatives are more than enough reasons to raise the margins. It’s sucks? yes it is but there’s no option for us, like our current PM.
After all this…I am searching for brokers who will give high margin funding on delivery trades. … upstox is giving 1:2 !!!
Dont think you understood the post which I had written.
In a strategy which has cover, where there is no scope of a loss beyond (9000 INR) even if you consider incorrect option prices due to fluctuation in volatility, why block 15 times the amount for margin? It is unfair.
If I dont have a covered call or put to save myself from unlimited loss, then keep the margins as it is today, but such high margins for a Iron Condor or Butterfly like strategy is unfair business practice.
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i really dont think zerodha or any other broker can give margin benefits for the carry over trades …
all brokers increased their intraday margins for short starddle and starngle
FOR NIFTY Do ATM long straddle of next month on MONDAY.
Seems profitable.
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I think for small guys like me, going long is the only option left.
Like result days, elections etc.
Still I am studying about stock markets daily and trying to learn. Let’s see how this goes
The additional margins for the covered strategy is to cover for exit risk. Say you end up exiting 2 of the 4 positions, the strategy goes for a toss and is exposed to unlimited losses.
Thereotically simple, technically not simple. Exchange doesn’t recognise strategy baskets.
Options writing is not favorable now as theta decay is very less due to volatility and margin makes costly and also risk increased.
OPTION buyers will enjoy now so stay away from option writing specially beginners.
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Not sure I understand the statement “Exchange doesnt recognize strategy baskets?”
Well, brokers do understand what we are doing. That’s why we have a margin calculator in the first place
Else, why would buying one lot of futures in NIFTY naked require 91000 odd and the same reduce to 60k if you have a Call/PE Buy depending upon which strike you choose?
So if exchanges can update their system to recognize the strategies then it will help a lot of us. Instead of doing that they are doing margin increase.
The system is already there and implemented at broker level.
See the three images
Margin required changes based on risk if you are doing futures and covering with options. I am a bit surprised at the 3rd image though!
But with options like IC and butterfly margin required is exponentially high!!
@Umar your argument should hold true incase of futures also, isnt it? I am not arguing. Just trying to understand the rationale behind having 1.5L extra margin amount with the broker when possible loss is only 4-5k. (from my previous reply)
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