What does an investor need to do to trade in options?
An investor has to register himself with a broker who is a member of the NSE Derivatives Segment. If he wants to buy an option, he can place the order for buying a Nifty Call or Put option with the broker. The Premium has to be paid up-front in cash. He can either hold on to the contract till its expiry or square up his position by entering into a reverse trade. If he closes out his position, he will receive Premium in cash, the next day. If the investor holds the position till expiry day and decides to exercise the contract, he will receive the difference between Option Settlement price and the Strike price in cash. If he does not exercise his option, it will expire worthless. If an investor wants to write/ sell an option, he will place an order for selling Nifty Call/ Put option. Initial margin based on his position will have to be paid up-front (adjusted from the collateral deposited with his broker) and he will receive the premium in cash, the next day. Everyday his position will b
