Options Trading

Would the Premium to be received be considered for Marginable sell orders?

No, Premium benefit will not be given at the time of placing Marginable sell orders. Once the order is executed the benefit of the Premium is withdrawn since the Premium is now a crystallized entry for which you would get the Payout on the Indicated payout date. Now the entire margin amount is blocked from the limits. The following Illustration shows how margin is calculated on sell orders (Applicable to both Call and Put orders) You place a sell order in OPT-ACC-30-May-2002-150-CE, for 3000 quantity at a limit price of 20/- Current Market price of ACC is 140. Initial margin on ACC is 30%. The Buyer Out of the Money in this case and the seller gets benefit of this. (a) Margin 3000 * (140*30% - (150-140)) = Rs 96000 Margin on Order would be =Rs 96000 Please note - Exchange has identified option contracts in either Deep Out of The Money (OTM) or Non Deep OTM for which Exchange has stipulated separate Exposure percentage (also known as Extreme loss margin percentage). Hence accordingly for Deep OTM or Non Deep OTM option contracts Initial Margin percentage and Minimum Margin percentage would be revised accordingly.