Part4 Trading Institutional

Margin & Leverage in Options
Options provide high leverage—you can control large positions with a small investment. However, selling options requires margin, as risk is theoretically unlimited (in case of uncovered calls).

Role Risk Profile Margin Required
Option Buyer Limited Risk (Premium) No margin needed
Option Seller Unlimited/Large Risk Margin Required

Settlement & Expiry
Options in India are cash settled (not physically delivered), and they expire weekly or monthly, usually on Thursday.

Types of expiry:

Weekly Expiry: Mostly for indices like Nifty, Bank Nifty.

Monthly Expiry: For stocks and some indices.

If you don’t square off your position before expiry:

In-the-money (ITM): Auto exercised.

Out-of-the-money (OTM): Expires worthless.