What is the minimum amount required for Options Trading in India?

Short Answer

Options are of two types- call option and put option. You need quite an amount of money to trade in options because it has costs such as premium, brokerage. etc. To know more about the topic, read the detailed version.

Detailed Answer

Introduction to Options trading:

  • Options are a form of conditional derivatives policy that allows the holder to buy or sell the principal asset at a predetermined price before or after the agreement expires.
  • The sellers pay a "premium" to option buyers in return for this right.
  • They will purchase a call option on this asset and sell a put option on it. A ‘call option' is one that allows you to buy an option that will help you buy shares later, while a ‘put option' is one that allows you to sell an option that will allow you to earn securities later.

Minimum amount requirements for options trading:

An individual who is interested in Options trading needs to have at least premium amount in addition to other charges that will be levied and brokerage. You must have enough margin money in your account to acquire an option as the risk bearing is quite high, as determined by your brokerage and trade.

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Discussion (3)

    There is no minimum investment required to begin trading options. It all depends on the type of contract, the option premium, and the expiry date. However, in order to sell options, you must have a substantial amount of money because the margin is very low, providing less leverage. Beginners should have at least 50k in their trading account to trade options.

    Options trading, especially options buying can be done with a capital of even Rs 1000. However, the probability of making money from purchasing options is extremely low. But you can implement hedged strategies like 'Iron condor', 'Bull put spreads', etc where the margin requirement is low at around Rs 40,000 per lot, and generate decent returns.

    There is no exact amount for investing in options. But then you would need a limited amount based on the "Lower Circuit" of the options contract. Anything greater than the value of the lower circuit can be invested into options trading. Based on the trend, the prices could fluctuate anywhere from 3 rupees to 200 rupees per lot.

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A common question that a newbie trader wishes to ask, what is the minimum amount I need to start stock trading in India? A query whose answer we probably look for to initiate our stock investment journey.

How much money is required for Options trading?

Options trading involves two aspects. One is options buying and the other is options selling. To buy an ATM option you will require around Rs 10,000 to Rs 25,000 per lot for an Index or stock option. On the other hand, you will require close to Rs 95,000 to Rs 1,50,000 for selling 1 lot of index option. These amounts change with respect to the time remaining to expiry and other market conditions.

Can I trade in US Options from India?

Yes, individuals can trade US options from India. There are many platforms as well which allows the individuals to trade internationally, it just depends on them what they are comfortable the most with and prefer trading from.

How to become a profitable Options Trader in India?

With the increasing exposure of the stock markets, more and more people are trying a hand in options trading. Options trading have become a lucrative place for individuals to earn money. The reality is certainly different. More than 95% of individuals lose money in Options trading, There are various reasons behind this. Find out the reasons for losses and the steps by which you can be a profitable options trader here.

Is online trading safe in India?

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Can I do stock trading in India without a broker?

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Which Options Greeks should you know about before Trading Options?

Options Premiums are primarily made up of two values. Intrinsic Value and Time Value. Whereas the change in the price of the Option premiums is dependent on five factors called Option Greeks. These are Delta, Gamma, Theta, Vega, and Rho. Know more about options greeks and which Greeks should a trader keep an eye on while trading Options.

What is the Best strategy for Options Trading?

There are many complex Option Trading strategies out there but the most profitable are some of the simpler ones. The top 3 of them are Long & Short Straddles, Long & Short Strangles and Bull/Bear spreads.

What is Uncovered or Naked Options Trading?

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Which is the best time frame for Options Trading?

Options Trading is a risky business and options traders have to look at various parameters before taking a trade. Choosing a time frame is one of the factors in options traders. Both option Buyer and Sellers use different time frames to trade. Let's see which time frame is most useful for options buying as well as selling.