How much margin is required for option hedging?
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How much margin is required for option hedging?
The change which has been implemented will give margin benefit even while placing the second leg of the hedge order. For Eg: If you buy Nifty 11200 CE of 20th Aug you pay a premium of approx ₹140. If you hedge this position by selling Nifty 11400 CE of 20th Aug you need margin of ₹1.18 Lacs.
Can I buy far OTM options in Zerodha?
Zerodha does not allow to buy OTM options even for hedging short option positions.
Which option strategy requires less margin?
Debit Spreads – Debit spreads involve buying in-the-money options and selling out-of-the-money options. In this case, the right to exercise the long option at a more favorable strike price offsets the obligation to sell at the less favorable strike price, which means that no margin is required.
Can I buy OTM in Upstox?
Best broker if you trade deep OTM index options, ATM stock options, positional calendar spreads. Upstox blocks near OTM options and even ATM options if there is illiquidity. Refer here. Upstox gives more margin benefits than Zerodha and Alice.
How much margin is needed to buy options?
The near month option will use 20\% more margin than the present month option….Margins for Options.
| Strike Price of Option | Margin Required |
|---|---|
| At the Money | Same as Futures |
| In the Money | 30\% more than Futures Margin |
| Deep in the Money | 60\% more than Futures Margin |
| Out of the Money | 20\% less than Futures Margin |
How much margin is required to buy options?
Margins for Options
| Strike Price of Option | Margin Required |
|---|---|
| At the Money | Same as Futures |
| In the Money | 30\% more than Futures Margin |
| Deep in the Money | 60\% more than Futures Margin |
| Out of the Money | 20\% less than Futures Margin |