Zerodha - Number One Discount Broker in India

If you buy options on Monday and hold it for the next day and then sell on tuesday, this money you receive only on wednesday. Now with your sales proceeds you do an intraday trade, there is no issue. But with this sales proceeds you buy more options and keep it overnight, you are buying with no money in your account and hence is considered short margin.
In that case, Why is it that money lost intraday cannot be used?
Looks like the exchange is playing unfair right?

If you have made profits, It needs to be credited the next day.
If you have made losses, It is debited intra-day. Isn't this unfair?
 
Zerodha,

Why is it that you guys are providing intra-day(MIS) margins for option sellers and not buyers? What trading sense does it make to sell options on an intra-day basis?!?! By the same token, why aren't you providing MIS for buying options?

Please clarify. It is confusing.
 

Trader J

Well-Known Member
In that case, Why is it that money lost intraday cannot be used?
Looks like the exchange is playing unfair right?

If you have made profits, It needs to be credited the next day.
If you have made losses, It is debited intra-day. Isn't this unfair?
Wow....You want to trade using as margin intraday money lost...and if you lost more money than again you want to trade....Wow it means unlimited trading till market end for the day....:confused::confused:;);):rofl::rofl:
 

Zerodha

Well-Known Member
Zerodha,

Why is it that you guys are providing intra-day(MIS) margins for option sellers and not buyers? What trading sense does it make to sell options on an intra-day basis?!?! By the same token, why aren't you providing MIS for buying options?

Please clarify. It is confusing.
Shorting/writing options work similar to futures in terms of risk management and hence the leverage is provided.

So if you short a 7700 call at Rs 100, a margin of around 25k is blocked, and this is as good as futures or in fact better than futures to contain risk.

When you buy the same option at Rs 100, only Rs 5000 is required and assuming we allow you to buy this at say Rs 50, and assuming market is moving around quite a bit, risk management is a lot more tougher.

So shorting 7700 calls require 25k and your real losses start at around 7800, buying 7700 calls require only 5k and real losses start immediately, and hence the leverage for shorting and not buying.
 

Similar threads