There is a change in F&O Margin Policy again? Can somebody explain how this will affect us?


#103

@Sunita_Grover,
You can go through this link

:slight_smile:


#104

Dear @Praveen_Chikkappaiah,
All broker have same overnight position margin.
TRY to change/optimize your strategy with your capital as 5lakh still not bad.
:slight_smile:


#105

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.


#106

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?


#107

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.


#108

After all this…I am searching for brokers who will give high margin funding on delivery trades. … upstox is giving 1:2 !!!


#109

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.


#110

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


#111

FOR NIFTY Do ATM long straddle of next month on MONDAY.
Seems profitable.

:slight_smile:


#112

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 :slight_smile:


#113

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.


#114

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.

:slight_smile:


#115

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?


#116

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.


#117

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)


Higher margin for spread trading in nse
#118

Today do OPT WRITE

SELL — 10700PE 150qty @ 77.1
SELL — 10600CE 75qty @ 151.45

Don’t wait till EXP book profit earlier.
ST
POSITION PROTECTION LOWER 10547.18 UPPER 10905.65

:slight_smile:


#119

If we want to take advantage of premium decay , we should sell OTMs…
Selling 10700 ce and 10600 pe is better ( 130 points now)


#120

ITM is better for now gives you long rang protection + higher IV & theta. have look on greek.
I have given this strategy by looking other various things.
Short term trend is going to stop means NIFTY will not fall and also other things.

DISCLAIMER & CAUTION : This are from my calculation not GUARANTEE.


#121

Hey, for the sake of context, it would be better if you stick discussing the question at hand. If it isn’t pertinent, you can either find the right topic or create a new thread.


#122

Sorry, will be more cautious in future.

Thanks
:slight_smile: