As per the new margin Rule by NSE the margin requirement for hedged position is very low.However for naked F&O positions it is higher.
As a result of this new rules option writers can continue their business with low capital.
For example if you have a capital of Rs130000 and you have a view that nifty will trade between 10000 and 11000 in July series .You can sell 10000 pe and 11000 ce .As of now both are trading at 90 rs .So if market expire in the above mentioned range your profit will be 180*75=Rs13000
you will be in loss if nifty cross 11100
or nifty drop below 9900
Earlier the margin requirement for this stratergy was more than two lakh
Few things one has to consider
1) If india VIX is staying below 30 it indicate a range boud or less volatile move
2) If India VIX is staying above 30 then nifty will be very volatile and not in a range
As a result of this new rules option writers can continue their business with low capital.
For example if you have a capital of Rs130000 and you have a view that nifty will trade between 10000 and 11000 in July series .You can sell 10000 pe and 11000 ce .As of now both are trading at 90 rs .So if market expire in the above mentioned range your profit will be 180*75=Rs13000
you will be in loss if nifty cross 11100
or nifty drop below 9900
Earlier the margin requirement for this stratergy was more than two lakh
Few things one has to consider
1) If india VIX is staying below 30 it indicate a range boud or less volatile move
2) If India VIX is staying above 30 then nifty will be very volatile and not in a range
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