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Option Spread Trades Margin |
Dani
White Belt
Joined: 01 Nov 2012
Posts: 1
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Post: #1  Posted: Wed Mar 05, 2014 5:42 am Post subject: Option Spread Trades Margin |
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| If you buy and sell calls or puts as a spread then the exposure risk is zero. The maximum loss or gain is limited to the spread difference. In this scenario, how Tradejini calculates margins? |
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TradeJini
White Belt
Joined: 02 Jan 2014
Posts: 37
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| Post: #2 Posted: Wed Mar 05, 2014 11:07 am Post subject: Options Spread Margin |
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Please provide an exact scenario to illustrate the margin requirement as there are varied combinations possible.
Happy Trading  |
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Abhi
White Belt
Joined: 22 Oct 2011
Posts: 20
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| Post: #3 Posted: Sat Apr 12, 2014 4:39 pm Post subject: Option Spread Trades Margin |
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TradeJini,
I want to Buy Banknifty Apr'14 future and sale Banknifty May'14 future SIMULTANEOUSLY. In that case what is the margin requirement for this TOTAL position? One of my friend told me that the margin would be roughly 7K for the TOTAL position. |
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Hydrogen
White Belt
Joined: 18 Feb 2014
Posts: 87
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| Post: #4 Posted: Tue Apr 15, 2014 10:46 am Post subject: |
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I would also like to add my query in this section.
e.g. I want to create a Vertical Spread in Option. Lets take an examples.
Buy NIFTY 6700 PE 38.3
Sell NIFTY 6500 PE 6.8
Calculation Part.
38.3 * 50 = 1915 (This amount will be debited from my trading Account)
6.8 * 50 = 340 (This amount will be credited to my Account)
Net Investment = 1915 - 340 = 1575.
Now I want to know since I am selling NIFTY Option. How much Margin will be
blocked by my broker, for creating above spread. |
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TradeJini
White Belt
Joined: 02 Jan 2014
Posts: 37
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| Post: #5 Posted: Tue Apr 15, 2014 6:03 pm Post subject: Re: Option Spread Trades Margin |
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In the case of the Bank nifty illustration, the margin required for the month -spread position is approx 24-26k at current date
Happy trading
Tradejini Team
| Abhi wrote: | TradeJini,
I want to Buy Banknifty Apr'14 future and sale Banknifty May'14 future SIMULTANEOUSLY. In that case what is the margin requirement for this TOTAL position? One of my friend told me that the margin would be roughly 7K for the TOTAL position. |
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TradeJini
White Belt
Joined: 02 Jan 2014
Posts: 37
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| Post: #6 Posted: Tue Apr 15, 2014 6:05 pm Post subject: |
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For buying an option you need to pay the full option premium
For selling an option you have to maintain span and exposure margin as per the exchange span calculator
In the illustration provided, the Span margin required will be 8-9K. Including the exposure margin the total margin (span+ Exposure margin) required will be 18-20K
Happy Trading
Tradejini Team
| Hydrogen wrote: | I would also like to add my query in this section.
e.g. I want to create a Vertical Spread in Option. Lets take an examples.
Buy NIFTY 6700 PE 38.3
Sell NIFTY 6500 PE 6.8
Calculation Part.
38.3 * 50 = 1915 (This amount will be debited from my trading Account)
6.8 * 50 = 340 (This amount will be credited to my Account)
Net Investment = 1915 - 340 = 1575.
Now I want to know since I am selling NIFTY Option. How much Margin will be
blocked by my broker, for creating above spread. |
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Hydrogen
White Belt
Joined: 18 Feb 2014
Posts: 87
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| Post: #7 Posted: Wed Apr 16, 2014 11:01 am Post subject: |
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| Thanks TradeJini for your reply |
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pattiboy02
White Belt
Joined: 16 Mar 2009
Posts: 220
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| Post: #8 Posted: Mon Jul 07, 2014 2:44 pm Post subject: |
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TradeJini,
I'm also want to know about margin required in Nifty Option Selling:-
e.g.
Sell NIFTY 7800 PE 152
Sell NIFTY 7800 CE 152
How much Net Margin will be used initially to put this trade (forgot MTM loss/profit) if my trading account has credit of Rs 100 k.
Regards
pattiboy02 |
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welgro
Brown Belt
Joined: 24 Sep 2012
Posts: 1784
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| Post: #9 Posted: Mon Jul 07, 2014 4:40 pm Post subject: |
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| pattiboy02 wrote: | TradeJini,
I'm also want to know about margin required in Nifty Option Selling:-
e.g.
Sell NIFTY 7800 PE 152
Sell NIFTY 7800 CE 152
How much Net Margin will be used initially to put this trade (forgot MTM loss/profit) if my trading account has credit of Rs 100 k.
Regards
pattiboy02 |
approx margin 43K |
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pattiboy02
White Belt
Joined: 16 Mar 2009
Posts: 220
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| Post: #10 Posted: Tue Jul 08, 2014 7:03 am Post subject: |
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Dear welgro
From which software you have showing this screenshot.
regards
pattiboy02
| welgro wrote: | | pattiboy02 wrote: | TradeJini,
I'm also want to know about margin required in Nifty Option Selling:-
e.g.
Sell NIFTY 7800 PE 152
Sell NIFTY 7800 CE 152
How much Net Margin will be used initially to put this trade (forgot MTM loss/profit) if my trading account has credit of Rs 100 k.
Regards
pattiboy02 |
approx margin 43K |
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welgro
Brown Belt
Joined: 24 Sep 2012
Posts: 1784
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| Post: #11 Posted: Tue Jul 08, 2014 7:09 am Post subject: |
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| pattiboy02 wrote: | Dear welgro
From which software you have showing this screenshot.
regards
pattiboy02
| welgro wrote: | | pattiboy02 wrote: | TradeJini,
I'm also want to know about margin required in Nifty Option Selling:-
e.g.
Sell NIFTY 7800 PE 152
Sell NIFTY 7800 CE 152
How much Net Margin will be used initially to put this trade (forgot MTM loss/profit) if my trading account has credit of Rs 100 k.
Regards
pattiboy02 |
approx margin 43K |
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pattiboy02
White Belt
Joined: 16 Mar 2009
Posts: 220
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| Post: #12 Posted: Tue Jul 08, 2014 7:12 am Post subject: |
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thanks welgro
| welgro wrote: | | pattiboy02 wrote: | Dear welgro
From which software you have showing this screenshot.
regards
pattiboy02
| welgro wrote: | | pattiboy02 wrote: | TradeJini,
I'm also want to know about margin required in Nifty Option Selling:-
e.g.
Sell NIFTY 7800 PE 152
Sell NIFTY 7800 CE 152
How much Net Margin will be used initially to put this trade (forgot MTM loss/profit) if my trading account has credit of Rs 100 k.
Regards
pattiboy02 |
approx margin 43K |
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venkkatshiv
White Belt
Joined: 16 May 2008
Posts: 90
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| Post: #13 Posted: Tue Jul 08, 2014 10:29 am Post subject: |
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| pattiboy02 wrote: | thanks welgro
| welgro wrote: | | pattiboy02 wrote: | Dear welgro
From which software you have showing this screenshot.
regards
pattiboy02
| welgro wrote: | | pattiboy02 wrote: | TradeJini,
I'm also want to know about margin required in Nifty Option Selling:-
e.g.
Sell NIFTY 7800 PE 152
Sell NIFTY 7800 CE 152
How much Net Margin will be used initially to put this trade (forgot MTM loss/profit) if my trading account has credit of Rs 100 k.
Regards
pattiboy02 |
approx margin 43K |
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HELLO, TRADERJI, I use Reliance money for my trading it gives in option calculations the values of gama veda ....... something like that how to use those values and what is the purpose of them and how to valuevate of entry and exits. please explain .very confusing .Thank you, Take your own time but pl.reply. sorry. |
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welgro
Brown Belt
Joined: 24 Sep 2012
Posts: 1784
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| Post: #14 Posted: Tue Jul 08, 2014 11:50 am Post subject: |
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| venkkatshiv wrote: | | HELLO, TRADERJI, I use Reliance money for my trading it gives in option calculations the values of gama veda ....... something like that how to use those values and what is the purpose of them and how to valuevate of entry and exits. please explain .very confusing .Thank you, Take your own time but pl.reply. sorry. |
Dear venkkatshiv,
Read page : Greeks and option pricing behaviour.............................24-28
You will better understand about Option Greeks |
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