Margin required for writing nifty put option is seen as higher than call option. Why is it so?
Panic spreads faster than greed, meaning the rate at which the Put option moves can be faster than the rate at which call option moves.
Hence from a risk perspective it is way more risker to write Put options than Call options. For this reason RMS demands a higher margin for Put options.
I’m certain there is a mathematical explanation for this, trying to get hold of it…will post it here the moment I do.