Lowest Margin Requirement For Short Selling

How much option margin is required in Zerodha?

Option buying - To buy options, either equity or currency there is no additional leverage.That means if you are buying calls or puts of any contract, the premium required to buy them has to be present in your trading account. You can trade options either with product type as NRML (over night position) or MIS (Intraday position), but since there is no additional leverage provided if you use product type as MIS, it is advisable not to use MIS while buying options since all MIS positions would get squared off before the close of markets.Options Shorting/Writing – To short options, you need to have 40% of NRML margin to take Intraday position.The margin required for shorting/writing options depends on various aspects like underlying, expiry, volatility and more. Zerodha is the first brokers in India to have an online SPAN calculator tool which lets you calculate the margin requirement for shorting an option by mocking the position in the tool.You can short option either using the product type as NRML or MIS. The SPAN calculator tool lets you know the margin required to hold overnight or NRML margin, if you trade using MIS you will need only 40% of that margin.-Irrespective of how many lots you buy/sell, Trade @ Rs.20/executed order-At Zerodha, all stock investments are Free & a maximum of Rs. 20 is charged per executed order for Options, Futures, Commodities & Currencies.Charges:Equity & Mutual fund Investment - Zero BrokerageF&O and Commodity Trading - flat Rs 20 per order.Open an online trading & demat account with the best discount broker and enjoy zero brokerage.Click here to open account in 2mins: open online account.

What are the highest probability of profit, lowest margin requirement, and limited risk option strategies?

If you want all the three, highest probablity of profit, lowest margin requirement, limited risk , then it is difficult. You can buy call options or put options. Lowest  margin requirement,  limited risk but highest probality of profit could not be expected. You can keep on buying out of money put options for a very low margin. Most of the time you may lose, but when the market corrects sharply or collapse, then you stand to gain substantially.IRON CONDOR.  I have written in another post. Here the chances are 60 to 70 percent of the time, you stand to gain. Reasonable risk, not limited risk. But the margin requirements are reasonable, not low. You stand to gain about 3 pc per return per month.

What is the minimum margin required to trade Bank Nifty?

What is the minimum margin required to trade BANK NIFTY ? :BANK NIFTY contracts can be trade in two ways.(a) Futures Trades(b) Option TradesMargin for the trades consist of two parts.One part is exchange mandated compulsory part and the other part is for risk management at the broker’s end.At icicidirect , BANK NIFTY contracts can be traded at 7.5% margin.For day trades, it can be traded even at lesser margin if the trade is entered in their FUTURE PLUS WITH STOPLOSS segment.Different brokers would allow trades with different margins which can be ascertained from the Margin Calculators provided at their web sites.The amount for margin for 1 Lot of BANK NIFTY at Fyers - Your Next-Generation Online Stockbroker is shown below:It shows that for for regular trade with BANK NIFTY Price at 25172, margin for 1 Lot is Rs. 80550 while for day trade, it is reduced to Rs. 32220.Margins keep on changing slightly depending on the volatility.In case of Option trades, if you are a buyer, the premium paid is all you have to pay.For writing Options, margin money similar to Futures trade is required.I hope this answers the question.

How much capital is required to short Nifty futures on a delivery basis?

Just google zerodha margin calculator and you will get the nubers, it is same be it long or short.Remember margin accouting is done daily and you have to maintain the stipulated margin in your account to carry the position. So if your position is going against and there is a loss, there might be margin shortfall and you have to add that amount if not already there in your account else your position will get force liquidated.While you might pay ~ 60 k for trading a lot on Nifty, remember you are dealing in a contract with total value of more than 7.5 lacs. Move of a percentage point is close to 7.5 k which is ~ 12% of your margin money. When you make profit it would feel really good but when there is a loss it will hit equally hard.Always mangae your losses very well.

How can you afford to write options when the margin required is so high and the returns are so low?

If you can generate 20% + returns year on year on your capital, compounded, you are on your way to becoming the next Buffet.Middle income groups don't get this.Selling OTM options allows me to make easy 1.5–2% per month. Which is 20%+ per annum. It's the best way to compound without depending on any stock's performance.Name one fund or source which can provide you fix 20% y.o.y.There is risk, but as a trader I am aware of it and know how to avoid it.2% p.m. isn't a low return. Given 10Cr or more and a 20% + target ROI, I'd certainly sell options.