NIFTY Options trade : Why and what-if...

[columbus]

Please clear : If i have a open postion in option trade against margin which i am getting against share, and keeping cash for MTM, Will broker charge interest on margin amount i am utilising. if yes how much........

Hi aj,

Options mainly deal with premiums.One will take options ,after FULLY paying
the premiums.My broker is Zerodha.If a trade goes against you, then the
premium you paid previously Rs.100 may become Rs.75. If all trades goes
against you till EXPIRY ,then it will become ZERO.

 

[columbus]

The EFFECTIVE ZONE, continued to be 4700~5000 ,as we are nearing EXPIRY.
In the EFFECTIVE ZONE on strike is closed from PUT side (4700).As on today,
4800/4900/5000 are in strong contention for expiry strikes.The chances of
market moving ahead appears to be SLIM.5100 and 5000 strikes are the only
strikes added positions in CALL window,rest shed positions.

 

[ajshare108]

Hi aj,

Options mainly deal with premiums.One will take options ,after FULLY paying
the premiums.My broker is Zerodha.If a trade goes against you, then the
premium you paid previously Rs.100 may become Rs.75. If all trades goes
against you till EXPIRY ,then it will become ZERO.

Sir,

I asking about selling of option which require margin of about 10-15% of contact value. Some broker are considering this margin against my shares in demat account. My question is that if I keep cash for MTM (mark to mark) and keep my selling option position against margin provided by broker against my shares. will Zerodha will charge interest on utilised margin.

 

[timepass]

Did you notice the frenzied buying in puts in last 10 min ?? I was watching 4800PE & 4900CE. I hope all those put buyers don't have to face hell tomorrow morning

 

[columbus]

Sir,

I asking about selling of option which require margin of about 10-15% of contact value. Some broker are considering this margin against my shares in demat account. My question is that if I keep cash for MTM (mark to mark) and keep my selling option position against margin provided by broker against my shares. will Zerodha will charge interest on utilised margin.

Hi aj,

I generally BUY options first and SELL later.BUYING and SHORTING of same
options ,can be achieved BUYING of different options (PE and CE) first.For
example SHORTING of CE options is equivalent BUYING of PE options.
Few months back ,I mistakenly SHORTED options.Around 2.30 I got a call
from Zerodha, asking me to close trade within market hours,as my trading
balance was not strong.Though by doing so,it is not 100% equivalent,
You can eliminate the MTM headaches.

By the by,you signature line is good.

 

[ajshare108]

Hi aj,

I generally BUY options first and SELL later.BUYING and SHORTING of same
options ,can be achieved BUYING of different options (PE and CE) first.For
example SHORTING of CE options is equivalent BUYING of PE options.
Few months back ,I mistakenly SHORTED options.Around 2.30 I got a call
from Zerodha, asking me to close trade within market hours,as my trading
balance was not strong.Though by doing so,it is not 100% equivalent,
You can eliminate the MTM headaches.

By the by,you signature line is good.

Thanks,

I am a long term investor, putting my money with a horizon of 2-3 year. In this market I am since last 15-16 Years. but since last 2-3 years i start trading mainly in NIFTY. I try lot but could not get much success in Trading. after every try, finally I start shorting far way CE and PE for which I have to keep margin amount in my trading account along with MTM amount.

some one told me that If I will utilize margin amount which I can get against my long term portfolio, I have to keep only MTM amount in my trading account and the broker will not charge interest on margin amount which i am getting against my portfolio.

so before I will discuss this with my broker, I am just putting my query to you and all senior member that which brokering firm are not charging interest. so that i can get better deal with my broker.

 

[gunsho]

some one told me that If I will utilize margin amount which I can get against my long term portfolio, I have to keep only MTM amount in my trading account and the broker will not charge interest on margin amount which i am getting against my portfolio.

I switched from ICICI to Geojit to Zerodha. None of them consider the stocks that we hold as margin straight away. Whoever says that, will be charging interest on the margin amount. Pl check with your broker to clear out any assumptions.

"Collateral Margin" is something that will help, if it is a very long term portfolio of yours. In this case, the shares would move from your beneficiary account to your brokers beneficiary account through an Off- Market transfer. You broker would then consider your shares as margin. This transaction is not automatic, you have to initiate it and withdraw share back to your account when you don't need the margin. Also, all the times, you will remain as the owner (though it stays in your broker's beneficiary account), so you will get the dividend or any other benefits as an owner.

 

[columbus]

With Expiry ONE week ahead we are concerned with another EZ,that is
EXPIRY ZONE,which stands at 4900~5100, this is another zone in earlier
EZ.(Yellow colour).The PUT window width appears to be FAT since it contains
low priced and high volume options.The way market is moving ahead the
likely strike on expiry is 5100.

 

[columbus]

With EXPIRY hardly 3 days away, the expiry zone is fast condensing to 5100~
5000.In expiry zone ,the options in CALL window is 11.7Million versus 8.4M in
PUT window.Bias is slightly positive.

 

[valuable_earner]

Hello columbus,

Thanks for interpreting options data for us... Its really a great help...

can u please answer below question...

I am seeing some option data of some shares ... sometimes what happens like there is OI of Calls of suppose 40 lakh and OI of Puts is 15 lakh but suppose today OI of Put increase almost 30-40% (more increase than Calls OI) so what will be the moment of the share is it in upside or downside .... As there is already 40 Lakh OI of Calls is standing at the same time so if Puts OI increase will it shows upside? Hope u get my point.

The same point u said above about nifty calls and puts ... can u please elaborate for me and how it effects the movement and prediction.

Thanks for giving ur time.

Regards