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Future and Option Selling Margin Has Increased from 21 January 2019 What to Do

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Traditional brokers charge a lot for brokerage; however, this broker does not charge anything for stock buying and selling. Also, you can set GTT (Good Till Triggered) order after buying a stock, so that the system can sell the stock automatically at your target price even if you are not monitoring the market. Only 25k is blocked for option selling with hedge. Also, you get a lifetime free account in Sensibull (virtual trading app & strategy builder) which charges Rs.800/-+GST a month. Learn option hedging strategy if you open an account today. It takes 5 minutes to open an account online. Click here and Open Free Account with Them Today >>

Here is the new change in future and option selling margin from 21-January-2019:

Change in F&O margins from January 21, 2019

Here are the official circulars:

SEBI: https://www.sebi.gov.in/legal/circulars/dec-2018/review-of-risk-management-framework-for-equity-derivatives-segment_41314.html

NSE: https://www1.nseindia.com/content/circulars/CMPT39766.pdf

There will not be any change in margin for option buyers. However if you are future trader or option seller – this might effect you. Mainly profits will reduce in terms of percentage on the margin blocked if you trade future or sell options.

Well there are a few things that you can do while trading options as a seller or trading futures:

  • Try to scalp your trades: Scalping is an art where an trader calculates every expense in a trade like brokerage, taxes (STT), GST and of course short term tax and knows how much points he needs to make a profit after paying all the taxes. This is where he exits the position. For example let say in a trade 2 points are required for brokerage and taxes, he will try to exit in 5 points. This means he can take multiple trades in a day and come out good. Of course scalping is hard to do in positional trading. But its not that difficult. Its just that we target more profits and come out successful most of the times. My nifty and bank nifty courses teach exactly that. Strike selection, when to enter a trade, when to exit, how to hedge, adjustments if any required or hold without adjusting etc, everything is explained well.
  • Trade with less number of lots: of course this is natural, if more money is blocked as margin then you cannot trade with the same number of lots as you traded a before Jan 21, 2019. Do not force yourself to trade with more lots by taking a loan or asking money from your parents or friends.
  • Take less trades: Earlier you were able to take 3-4 trades in different stocks or index now you cannot do that. So reduce the number of trades you take at one time. When you have no other choice you have to trade less.
  • Practice Intraday Trading: Less margin is required in intraday trading so try to trade intraday if possible. Of course if you have a job it gets difficult to trade Intraday, but whenever you can trade Intraday or just trade positional when you are more confident.
  • Learn Hedging: In USA margin is blocked on the maximum loss in a hedged trade not more. India tends to copy US markets rules and regulations, so you never know when the same rules will be applied in India. Knowledge oh hedging will help you when such a rule is applied in India too. To give you an idea less than 25% of the margin blocked as on today (14-Feb-2019) will be done if the “maximum loss in a hedged trade” is blocked as margin. This will increase the volumes and of course you will get the first mover advantage of already knowing hedging the trades. You will learn hedging in my course.

The idea is not to get frustrated and force yourself to trade. Not take a loan or do anything drastic that will destroy your wealth. It is always better to make less in stock markets than lose money in trading.

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Traditional brokers charge a lot on brokerage, however this broker does not charge anything for stock buying and selling. Also, you can set a Good Till Cancelled order after buying stock so that the system can sell the stock automatically at your desired price even if you are not monitoring the market. Plus only 25k is blocked for option selling. It takes 5 minutes to open an account online. Click here and Open Stock Buy & Sell Free Account with Them Today >>

About the author: Dilip Shaw I started trading stock markets since 2007. However my first 3 years were losses. Then I dedicated almost 1 year on studying, researching, paper trading options and learned a lot in that time. Since 2011 I am trading Nifty options profitably. Call me if you need any help trading options on 9051143004.

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