Options trading zerodha

Futures was more popular among the two until the market meltdown in after which the popularity of options has increased tremendously, much more than futures today. Following are the reasons which probably attributed to the increase in popularity of options on the NSE:. For holding a future position, you would need NSE stipulated margins which would work upwards of Rs based on what future contract you are trading whereas in options a trader with even Rs in his account could take some kind of an option position.

Future zerodha have unlimited risk, whereas in option buying the risk is limited to the premium you are paying. STT Security Transaction Tax charged by the government for Future is charged on the contract value whereas for options it is charged on the option premium. Option Strategy is a tool which we have introduced on Zerodha Trader which suggests you and helps build option strategies. Find following brief on how to use it: Login to ZT and make sure you launch plus while logging in.

Option Strategy tool, based on your view suggests you various option trading strategies and their payoff graphs. As an example, if my view is that nifty will stay in the range of and for this expiry NOV First step is for you to add all the nifty option strikes in this range on your market watch, so add — Calls and puts with November expiry. Visit this blog to know how to add options onto market watch.

Once you give a view the tool will suggest you 5 different strategies, as shown below. For the example, my view is that nifty will stay between to for Nov expiry. My View is that market will remain neutral that means neither bearish nor bullish and I also feel that market will be in a very narrow range. This suggests me 5 different strategies as shown in the pic below.

If you are not able to see the prices in the strategy section, click on the restore button as shown below. The window will look like below when you click on the restore button and the prices should start refreshing as the data is fetched from your market watch. So Ensure that the option contracts mentioned is available on the market watch as mentioned in point 2. See the Pic below:. Once you have decided to take an option trade, if it involves writing options selling optionsuse the Zerodha SPAN calculator to know the exact margins required.

Positions like the above will have margin benefits as they are partially hedged. But when you write options i. So to sell calls of nifty first and then buy back you would need almost 30k for an overnight trade.

This margin goes down for a strategy mentioned in the above pic because the various option postions are counteracting each other. Yes you can trade naked options i. Use this tool to help setup option strategies, study the payoff graph and proft trading options at Zerodha.

Madhan, we give margins for option writing intradaypretty high actually. Sir am new to it,am holding a account in zerodha,I want to learn the strategy of trading plz do refer for it,to whom I have to contact. Suggest you to look at this: Interesting tool very helpful for people like me who trade on options.

So that I can open 2 or more graphs. Yes PS, we provide SPAN margin benefit and we have a [SPAN Calculator] https: SPAN is available only on Zerodha Trader, if you are still using NOW trading platform send a request to migrate immediately. Arm, the above would be beneficial to people who have an understanding on options.

If I have 1L in my trading account, can I do the following option strategy. Sell 3 contracts of Bank Nifty March put for Buy 3 contracts of Bank Nifty March put for I want to hold the position for few weeks. Please tell if my thinking is correct. Margin required for only writing put per lot is Rs For taking 3 such positions, you will need 45k in your account.

The way you have calculated margin requirements is wrong, that is why we have introduced http: Thank you very much for the prompt reply. I was wondering if you guys could open an official forum for Zerodha members so that we could help each other out instead of disturbing the faculty.

Hello, Is there a way we can exercise the options in Zerodha Trader? If so, can you please tell me how to do it? All options on NSE today are european now, which means you can exercise it only on the expiry day. In any case on the expiry day all options get exercised by default, so need to have this facility as long as the options are european. In PnL 3rd screenshot in this write up only the Net premium paid is shown and not profit potential. How to check the profit potential?

How to add my own strategy, if not available now, please make it available soon. Last is basically the last traded price and best is basically the best available price. If both are the same, the result will show the same. In the payoff graph, and pay off, break even is missing, which is a key factor in determining which strike price to be taken for trade. The pay off graph is not showing the pay off in between the strike price, say nifty atcorresponding pay off is not showing, which is also vital.

Abrar, Feedback taken, let me bounce it off my tech team and see how much time they will take to sort this. Also there is a error in bearish strategy, instead of market wont fall, it should be market wont rise. Hi… I want to sell one lot put and one lot call. Is this for intraday or shall i carry till expiry… If that is for intraday, how much should i have to carry til expiry? If you are looking at the SPAN calculator for this by entering product type as NRML, this will be for overnight position and to hold till expiry.

Hi Kindly go through the following scenario: Nifty trading at then took Iron Condor as follows: Sell to Open CE PE Buy to Open CE PE After couple of days nifty moved toif the client want to take new Iron Condor position By Sell to open CE and PE And Buy to open CE and PE Then the existing CE Long position will be offset? Yes Sreejith it will be, you cannot hold opposite positions of same contract on a single trading account.

In equities, this can be done only on an intraday basis. For Futures, you can sell and hold until expiry by paying the margin amount for holding that short position. Option writers may not necessarily own the asset but they still take on the obligation to deliver the asset if the conditions are met for which they receive a small premium from the buyer of the option.

Dear Zerodha team, I cannot see the implied volatility figures for options. The pop up window shows all values as zero. I bought NIFTY options for PE and want to sell them at premium. How can I sell the lot I bought back at ? Do I need to open a sell order for that or can I simply square-off the position like in equity?

Go to Admin positions and click on the open position and say square off, this will sell it at market. Could you tell me where is it located in that page? Or is it not visible during off-market hours? The starter pack is free of cost which includes option strategy, charting, and more. There are certain products on Plus which are paid, you can see more here: I have never traded a option but i want to do some trade in it.

For example Nifty CE was trading at around in morning. So to have profit shall i buy call or put option? And i know call is like long and put is like short position.

So if market is bullish i shall buy call and if market is bearish i shall sell puts? I am actually having a big doubt among the 4 thing And one more thing lets say Nifty CE is trading at then what margin i require to have a long position?

Phew, you are starting at the very basic. Buy Calls, if the market goes up, premium will ideally go up and you can profit. But there are days when market could go up but calls premium could loose you money when the implied volatility drops, for example today, even though market is up call premiums are down.

When you buy calls, profits are unlimited but the risk is limited to the premium you pay. You can Short puts, when market goes up, put values will come down and hence if you are short puts you can profit.

When you short options, the risk is unlimited and profit is limited to the premium you receive when you short the option. Since the risk is unlimited, a margin is blocked in your trading account similar to futures. Long calls and short puts, ideally will make you profit when market goes up, but they are completely different in terms of how you make money and similarly with long puts and short calls.

Nitini am new to this fieldthe link which you have provided doesnt have any pdf ,which can explain options and its characteristics. Have you checked out Varsity? Our education initiative, has become quite popular. Hello sir trading make me understand Buy price and buy average price and how is buy average price related to settlement price and why it changes on daily basis of options?

Confused with your question Praveen. If you buy 1 lot at Rs 50, your buy price will trading 50 and buy average price will also show If you buy the second lot at Rsyour quantity will show 2 lots and your buy average price will now show 75, which is the average of 50 and I just cant understand how my buying Average price shoot upto On the trading platform, your profits for today will show based on the closing price of the options for yesterday and not based on your buying price and this is the reason you are seeing a loss and not profits on the platform today.

No there is no daily settlement on buy option positions, so if you options on 29th May Rs will get debited zerodha your account and when you sell at 80, Rs is credited to your account.

If it is done on an intraday basis, Rs gets debited at end of the day. Hello sir i want to ask one question. What happens to the value of option on expiration date? Does it becomes completely zero.

Actually i have been holding a nifty CE at premium of So shall i sell it or wait till expiration date. If the price becomes zero trading expiration then i will sell tomorrow only. So kindly tell me. Praveen, whatever value above Nifty closes on Thursday the expiry day, will be the value of your calls.

If Nifty closes at it will be and if it closes below it will be 0. Where will the market go is your call to make, but you can sell the calls whenever you want, there is no need to wait till expiry.

Sir I want to know about this… Suppose I have bought CE 20 on October 29 contract. And I want to hold this till expiry. Then on expiry should I sell the contract or it will be sold automatically. And also want to know on expiry if nifty close on …what will be the value of the position and if nifty close then what will be value of the position I hold. If it closes at your option will be worthat it will be worth 0. But do check this postexplains how STT charged is so much more for in the money expired options, it is best to square off all options that have any value to it in the market on expiry day.

I am completely new for trading registered few days back on zerodha platform want to clear few doubts regarding Option Trading. Yes, you can but the option and sell the next second itself or anytime before the expiry date of that contract. If you are buying options, you rather use NRML as there is no additional margin you get by using MIS. If you buy using NRML you can hold it till end of expiry, if you buy it as MIS, it gets squared off at 3.

Similar to how you placed a buy, just place a selling order at whatever price. YOu can also go to the admin positions link, and click on the square off option. What is the volume impact on Price of say a lot contract trade of Nifty CE if i want to buy at the open and fill the order immediately.

Similarly, if have bought this quantity as an MIS order, at what price will it square off at close — will there be a volume impact on price on this side as well?

At the market opening it is quite tough to call, it might sometimes be in your favor as well because of the higher volatility. Just want to confirm, If I trade a hedge strategy where my maximum loss is predefined, and I want to be in strategy till month end. Does Zerodha does autosquare off incase of heavy moment. If I buy a Unitech Future for October Thanks Nitin, If you give time say next day I can add margin, also would like to know more about opening an account.

Also, are there any charges for pledgeing in and out shares…there are few who charges and few dont. Someone will get back to you asap. If I place following order, what would be my brokerage for following order and can I place this combined order at one go at market price.

Since these are 3 different orders, it would Rs 20 x 3. You can place at once using basket order, but since they are different scrips they will be considered different orders.

Hi Zerodha, I was options the brokerage calculator and had a question on the brokerage charged for options. Taxes will be very low since taxes will applied on the premium.

I had assumed the brokerage too would be applied on the premium, and hence would be 0. However the calculator is showing a flat charge of Rs. How is the brokerage calculated for options? Rs 20 per executed order or 0. I am a New Zerodha account holder. I have doubt regarding Options Trading on Zerodha Web Platform My Initial Pay in Amount: On I bought PUT Exp: After that I bought CALL Exp: But, I did not sell it until now, I received your margin statement stating that I have only Rs.

Please explain how to trade on your web platform. Yep you are right. Check this section that will explain you all the option greeks. Also suggest you to look at Varsitywe will be starting a module on Options shortly. Not decay in stock price, but there is time decay in options premiums for sure.

Time value decays as and when we get closer to expiry. Could you please tell me how many maximum lots size in nifty or nifty option, one retail trader can place order or can hold. I mean If I enter quote like nifty It should give all strikes of calls,puts,all expiries with greeks.

Hi nitin it is very useful for me if you provide any free version software name like option oracle. As I said, we are developing something, might take some time. I would like to know whether we can create strategies by mixing futures and options.

If yes, then that would be very very nice. Can you please let me know this part. Hey nithin ,have trading few qus, 1 There are two types of options available in the Indian market — European and American. Index options, such as the nifty and sensex, are European-style. This means that they can be exercised only on the maturity of the option. For example, if you exercised a call and simultaneously sold the equivalent shares of stock, those transactions offset each other.

Assuming the option is in-the-money, there is no need to post margin for offsetting transactions. As always, you will want to check with your brokerage firm to ensure you understand their policies.

In this case the investor loses the premium paid i. So, if cmp was would the buyer still lose only the premium if yes, who does this remaining loss of rest with. All options on India are now European. So they can be exercised only on expiry day. Okay, so exercising options in India has no meaning as all contracts are cash settled. Let me explain, if you buy Nifty puts at Rs on say Aug 1st, you can sell it immediately, next day or any day till the expiry day of the contract.

If it closes above, it gets expired worthless. If nifty closes atputs get exercised and u get Rs 50 for those puts. Do check out http: This is not in the Indian context. In India, like I said, everything is cash settled. Advise you to go through Varsity. Start at the futures module. If a put was bought, and the stock price closes anything abovethe entire premium the put option buyer had paid will become worthless. It will not have any value. I have just the required amount to put a butterfly spread or an iron butterfly in place for a particular stock around k.

But if I only sell options for the same my margin requirement will be quite high around k. SO, in order to take benefit of the strategy for reducing the margin what should I do first. Zerodha I buy the options first and then sell for applying the strategy.

OR Should I sell first and then buy the remaining legs. The main issue is funds in my account as it is just enough to cover the exposure of a particular startegy. But here is the way to do this, use product type as MIS intradaytake all the positions. Now convert all of them to NRML, this way u will be able to get into the strategy with lesser margins.

I tried my level best to get hold of you with regards to your software and trading platform issues. I have begged to your team several times that when there is an issue, please communicate to the customers so that they zerodha look for alternatives. You and your team never believes in that. Today, since morning, none of your systemsPi, Kite, trade and nest, none of them are working and after several communication with your team, they have accepted that kite is not working.

I informed them several times that I am working in IT for last 25 years and dont give me such stuff. Now, when such things happens, who is responsible for all the loss occurring to customers?

I am an unsatisfied customer and now started looking for other options. A tool which suggests various option strategies based on what your views on the markets are including the payoff graphs for each of the suggested strategies.

Suggest you to go through this: Sir, I would like to know if I buy 5 lots of Options PE at Will I lose my entire premium or just a part of my premium?

I would like to ask you. Why am I unable to check option chain or delta of an option on Pi? So I opted for Zerodha open trade, and I figured out how the futures market works. But I see some trades such as: Could you enlighten me?

There are options with various strike prices. Thanks for your response. I will lose 0. May I know by when we can view option chain and calculate delta of an zerodha on Pi like on ZT? If there are no bidders, even if we put 0 or. In these cases whether we still had to pay the STT. I am guessing these are all out of the money options.

If it is expiring worthless, there is no STT to be paid. Whether option strategy can be created on the day before expiry or even on the day of expiry.

Is options strategy traded on intraday basis. Once option strategy is created is it possible to square off the strategy when our target is reached. Once option strategy is created on the day of expiry do we need to square off the strategy or will it automatically get exercised. You can post these questions on Varsity. Hi, NSE has launched weekly Bank Nifty options.

However, there is no details available when I am trying to calculate the margin requirement using the Zerodha Margin calculator. The weekly Bank Nifty Options not available in Zerodha Margin Calciulator 2. In KITE, could not locate the BANKNIFTY weekly contracts. The weekly contracts available in PI though. It will take a few more days to support weekly contracts on kite and on margin calculator.

It is available on Pi, the desktop platform. Hi Nitin, If I take a position in BANKNIFTY weekly contract through PI, is it possible to square zerodha the position in KITE? Or do I have to square it off through PI?

Also, is the margin requirement same as the monthly contract Options. Howeverwhen I tried taking position after reading your answerit automatically enters the monthly option position — even after specifying weekly expiry.

This has cost me some money as well!!! I have sent a mail to your support team on that trading. So, Can you please clarify 2 things here? Can we trade banknifty weekly options using ANY platform of Zerodha? If no, just for an ideawhen can we expect to trade these?

I agree that you guys provide super-easy and fast platform to trade — but on the cost of numerous operational issues, which need to be given the first priority! It works on Pi, if you are not able to see this, can you update the latest patch of Pi. We have updated here: Hi Banknifty weekly option when will be added to kite? Ppz send me a mail with details how to add it also.

Bank Nifty weekly option still not available in Kite. Your days has turned into weeks and about to turn into months and then years. Can we expect from you that you be ready with your systems from day one of product launches.

NSE announced the launch of the weekly option well in advance yet you are not ready. Bank Nifty weekly options are already available. Please tell where i will get the margin calculator for weekly bank nifty option trading. However margins will be around the same as required for the closest expiry monthly contract. Check this post, explains about option writing. You can use SPAN calculator for checking the margin requirements. Please check before responding. I am sure this will be the case with MCX commodity options as well once they are launched.

Finance minister announced in the budget in February that MCX commodity options will be launched and I am sure you guys are not ready as usual. Check that link again. Search for Banknifty 16 Jun CEthis will give you Banknifty CE expiring 16th June. You can similarly select other weekly options.

I am having positions of ANDHRA BANK —SBI AND TATA STEEL — 50 Holding. Now I want square off all position with SINGLE ORDER only. Is it possible with Zerodha kite or PI. Please extend the intraday MIS square off time of 2: Most of the time we see that during the last few minutes the market varies options. Dear Sie, Are you planing to add option chain with calculation of Greeks trading holding position like Sharekhan?

If all the legs have to be traded individually, Sir can the iron condor be traded on Zerodha Pi also. Hi Nitin, Has the option strategy tool been removed in Z trader, I still have it on mine. And found some errors in the strategy window test where moderately bearish says fairly certain market wont fall. You can try options oracle from Samoa sky, it is probably the most widely used. Will take some efforts from options side to integrate data.

We badly need Greeks for option positions. What are your future plans for Option traders. I too cant emphasize enough the need for Options Chain in Kite and Pi… The calls and puts should be directly tradeable from the Options chain.

Also there should be columns for Option Greeks like Delta, Theta, Gamma which are updated in real time with the Option prices. I am new customer. During using Pi latest version I selected a contract as: NFO — NORMAL — OPTIDX — NIFTY — 29SEP — CE — — NIFTY16SEPCE It added as: It can create confusion especially in BANKNIFTY which has weakly and monthly expiry while NIFTY has only monthly expiry. They are either overlapped, some part is hidden, not displayed correctly?

Is some resolution on which Pi display correctly? Regarding question 2, I have sent email with screenshot to support yesterday around I have a query regarding call option writing.

For example I have 1 lakh rupees in my wallet. I want to write zerodha NIFTY call 1 lot, qty: Let us suppose it needs 40k as margin. So my order gets executed and I have 60k in my wallet. As it is going up, remaining 60k keeps reducing? For example, that day premium ends at and I am not buying it to exit.

Next day morning how much will I have in my wallet? Again on that day premium came to 80 and I buy and exits. Now how much money I will have in my wallet after I exits. No, when you short options, the margin blocked will keep going up when in loss. Your wallet remains the same, But there will be more margin blocked. Can we use Option Strategy tool in PI and Kite if yes then would it be possible for you to guide me.

Hello Nitin Can you please calculate and the show the premium receivable on Nifty CE — Today it closed at Because Margin Calculator shows Rs. My manual calculation i. Am I right or wrong in calculation. Or is it the tax and brokerage added So High. As I am a new traderI am eager to know and plan according to it.

Your varsity module helped me clear NISM VIII Equity Derivative in first attempt. I had stopped trading for a while after making some silly common errors which u mentioned in your modules that normally new traders make. But after going through your derivative modules again and again I have learnt a lot specially your shorting OTM call options. I am not trading yet just watching the movement and trading virtually on paper.

The margins required for weekly options will be roughly the same as required to the closest expiring monthly contract. I am using Kite and PI and also have installed Nest. Actually I was looking for Option Strategy Payoff chart.

But could not find it any where. Can you help me for the same? Sir, In the case of Weekly Option in Bank Nifty, Is it an American option or European. Can we buy and sell at any point of time as in the case of monthly option? In case of zerodha has this features guide me how to use the same or is it in your pipe line for development or future release. You can check it out yourself on SPAN calculator.

Hi Nithin ji, Can you please provide some link of option payoff diagram generator to test my own strategies. Open an Account Updates-Latest at Zerodha Pi Beta Updates Why Zerodha? Zerodha Associate Program Zerodha in News — Headlines Zerodha in News — Quotes. Option Strategy — Zerodha Trader comments. Zerodha Trader- Software Version. Following are the reasons which probably attributed to the increase in popularity of options on the NSE: Options offer you an ability to setup trading strategies for multiple market scenarios.

See the pic below to launch Option Strategy: Zerodha Your friendly neighborhood discount brokerage. January 9, at 2: January 9, at 4: January 16, at 8: January 16, at 1: July 10, at November 30, at 8: November 30, at 9: September 18, at 7: September 18, at January 23, at 6: January 24, at 5: January 24, at 8: January 25, at January 25, at 1: January 28, at 2: February 8, at 3: February 22, at February 23, at 9: February 25, at 5: February 26, at 7: February 26, at April trading, at 6: April 24, at April 24, at 5: October 4, at 7: May 23, at 8: May 23, at 9: May 23, at May 24, at options May 24, at 7: May 24, at 9: September 15, at 8: September 16, at 5: September 23, at 2: September 24, at 3: September 26, at September 27, at 4: October 5, at 6: October 7, at 8: October 9, at 4: October 10, at 3: December 25, at 6: January 2, at 8: January 3, at January 3, at 1: January 6, at January 6, at 1: February 22, at 7: May 16, at May 16, at 2: July 28, at 1: July 28, at May 16, at 4: May 20, at May 20, at 1: May 20, at 2: May 20, at 9: May 26, at 9: October 11, at October 12, at 8: June 26, at 9: September 18, at 9: September 20, at September 22, at September 23, at 8: September 29, at 5: September 29, at 6: October 4, at 1: October 6, at 9: October 8, at 7: October 8, at November 3, at December 3, at 4: December 3, at 5: December 12, at RAM SURAJ MAURYA says: March 7, at 1: March 7, at 2: March 7, at 4: March 8, at March 27, at July 2, at July 3, at 3: July 3, at 5: July 3, at 8: July 8, at 7: August 14, at August 15, at September 19, at 4: September 19, at 5: November 2, at Zerodha- Year updates Z-Connect by Zerodha says: December 19, at 1: February 4, at 8: February 4, at March 31, at 1: March 31, at 2: July 21, at 1: July 21, at 5: March 31, at 3: March 31, at 5: April 10, at 4: April 10, at Lakshmi Kanta Panja says: May 28, at May 28, at 5: May 28, at 8: May 29, at 9: May 30, at May 30, at 4: June 4, at 4: June 5, at 1: June 10, at 1: June 10, at 2: April 12, at 2: April 12, at 3: June 7, at 1: June 10, at 9: June 11, at June 12, at 1: June 13, at August 3, at 7: August 3, at 9: August 11, at 3: August 12, at August 17, at 9: August 18, at August 18, at 9: August 18, at 1: August 21, at 9: August 21, at August 21, at 1: August 21, at 8: August 22, at August 23, at 8: August 24, at August 25, at 4: September 21, at September 21, at 6: Options 22, at 1: B Vamsi Krishna says: September 30, at 9: September 30, at 4: October 4, at 2: Vijay S R says: October 4, at 6: October 4, at 9: December 1, at 9: December 2, at December 2, at 8: December 11, at 4: December 11, at 8: February 27, at February 28, at March 1, at 5: March 2, at 8: March 7, at 3: March 7, at 9: April 9, at 2: April 9, at 4: Post a comment Click here to cancel reply.

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