Trading on margin is when you borrow money from your broker to place a trade. It's kind of like a loan and if you hold the position overnight then you will usually have to pay interest on that loan amount, but every broker is different so make sure to check with them before leveraging a trade.
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The premium for the contract is Rs 3 and lot size is shares. The Options expires worthless and you keep the premium received. The premium of Rs is your profit. Taking into account Rs you received as premium, your loss would be Rs So, Option sellers have a potential for unlimited loss and to cover this loss, they are asked to deposit margins. If you have positions in the Options contracts then you can get margin benefit i. However, the margin benefit is available for Options of the same underlying and is not available for Options of different underlying.
You also get margin benefits for the calendar spread positions i. However, the margin benefit is removed 3 days ahead of the expiry date of the near month contract. Best Discount Broker in India.
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Learn a variety of trading strategies and products to help you build your strategy with confidence. Margin trading entails greater risk, including, but not limited to, risk of loss and incurrence of margin interest debt, and is not suitable for all investors. Please assess your financial circumstances and risk tolerance before trading on margin.
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