Kartik,

Please clarify me on this.
I bought TCS 1150 CA @ 13 week before, @ the same time I asked my broker to sell its 1200 CA @ 6. So my overall cost price will become just 7.
He refused to do as I am not having enough Margin money in my account.

Whats the logic in this as I am already holding its 1150 CA, whats the problem in selling 1200 CA?? I tried to explain him a lot, but of no use. If he had done that earlier, even now I am in much a good position.

Please clarify me on this. The Margin he requested is right? As I am not doing call writing alone... I am holding a CA too.

Hi wht abt geometric result?-ve or +ve?

Hi Kb Trader,HI..!!!. Ready for the exams??..Hi SM, Thanks a lot. Silver is out ... While NG .. is about to hit 2nd round of UC!!Yes the accnt is active ..Will add a gold etf.
Hi Kartik, Around 5180 of nifty ..shall I add few stocks ...Taj gvk / mcleod and balmer lawrie..pl?

Hi cvrprakash, GE :) I can understand your situation. Let me try to explain:
1) The margin required for selling an option is comprised of a SPAN margin and an EXPOSURE margin.
2) In your case, though you are long in TCS 1150CE, as you are shorting an option (1200CE), your broker will ask for a margin for the short CE
3) As your case will qualify as a hedge, your broker will give you a discount on the margin usually charged for shorting the 1200CE. First of all he will charge you only the SPAN margin and not the EXPOSURE margin. Secondly, he will deduct the amount (premium) which you paid for the 1150CE, from the SPAN margin. Hence, your overall margin requirement will be lower than normal.
4) If there is still some doubt left, consider this scenario. Suppose your broker allows you to take both positions (long 1150CE and short 1200CE) without any margin, and TCS starts going up. Say, one fine morning, you decide to sell and square off your long 1150CE. You book profit in your 1150CE. Now, you are left with a short 1200CE for which full margin is required. Think, you never paid that according to this example. In the meantime TCS starts flying away on the upside and you have the potential to incur unlimited loss for the short 1200CE. You throw up your hand and say to your broker, that you will not give any more money as margin. What will your broker do? Will he bear the loss? He will not and hence, in order to avoid this kind situation, he will demand margin beforehand.

Hope this explains :)

Hi Gitanjali, You are most welcome and plz dont thank me in each and every post :) Yes, NG on fire. Have you noticed Lead? Somehow, I managed to make you book profit near the top of the day as of now...

sir for wat target shud i hold honda siel..where to exit???

Hi GM,

Thanks for your detailed explanation. Really appreciate this.
But I told my broker to hold the 1200 CA short till I hold 1150 CA long.
I promised not to sell 1150 CA before I buy back 1200 CA!! That comittment I gave.

SPAN/EXPOSURE margin - Any mathematical formula to calculate this?

Hi Kartik,
.Hi SM, It hurts to see ppl in losses as most have families who depend on them .Is there any way one could post a warning here ... May be that is asking too much'
Hi Pradeep, Hope today's fall did not affect you much ..best is not to trade each day ..My friend neelima had told me so...
Before a fall..usually one or the other warns...Like how ham did today... be alert or post a message here ..