Sold 1 lot of Nifty 9000 CE @ 40
I was asked for margin of about Rs 42000/-
If there are 30 days for expiry and I do not buy back and Nifty closes at say
Case 1) 8950
Case 2) 8999
Case 3) 9050
What will be my Net Profit/loss in all the above cases?
Will I get my exact blocked margin of Rs 42000 or will I get less after any interest/ Penalty or so?
Also, when do I get my sale proceeds of 40*75= 3000 ? Or Is it included in Margin?
When you write options, you get the proceed on the next day. So you will get Rs 3000 credited, but since you are writing options a margin will be blocked (approximately 40k) in your account.
1. Options expire at 0, you get to keep Rs 3000 and margin gets unblocked on expiry.
2. same as above
3. Option expire at Rs 50, so you hae to give back Rs 50 x 75 = Rs 3750. Your net loss will be Rs 750.
There is no interest/penalty. Check this post on option writing and module on options.
Thanks, is there anyway to find the price of OTM calls/puts on last day/week? Do you suggest selling naked options?