why Option buying is enabled for NIFTY and BANKNIFTY only in zerodha ?
This message populates in the BO/CO margin calculator when you wish to calculate the margin required for option selling. Equity option buying requires the entire premium amount in cash and does not operate on margins. Hence, you cannot place a BO/CO for equity option buying.
When it comes to Index options - Nifty and Banknifty, there is an exception here.
You will receive a leverage of 1.4 times when you place a Buy BO/CO in Nifty and Banknifty options as they are highly liquid products that trade actively. Hence, it operates on a margin in BO and CO.
To buy equity options, you can place an MIS order for intraday and an NRML order to carry it forward. Both MIS and NRML will require the entire premium amount for the position to be taken.
thank u for ur reply, but I want to know what do u mean by entire premium amount ?
If Nifty 8800 CE is trading at 100, then 1 lot(75 quantity) of this option would cost you a premium of 100 * 75 = Rs.7500