If you are an Intraday Trader in stock markets and you love trading via Options but due to occasional cash crunches you have to limit down your trading positions,here is a product for you which can take care of all these needs of you.This product is Option Plus.This product has been launched recently by select brokers.
Option Plus is just like the margin trading,popular among intraday traders in Equity segment.Now Derivatives traders can have that luxury of cash leverage through Option Plus.It allows you create intraday position with cash amount as low as 20-25% of the normally required premium to take position in an Option.This applies to both types of trading orders;buying or selling (writing) options. This allows you to acquire larger position in your trade and leads to higher profit potential with a small capital.
As the Option Plus provides you with cash leverage in the market and you are,thus, exposed to substantial financial risk due to any kind of unfavourable market movement,there is an inbuilt tool to lower your risk.While you place your order through Option Plus,you will be asked to put your cover stop loss also.You can not place only your buy or sell order but it is mandatory to have your stop loss order too.Another thing which is very important and should be kept in mind is that while your cover stop loss order is of course a Limit order but the first order you place to create the position will be a Market order.Decisions taken in haste or impulse would expose you to undue loss.
It is quite possible that you may not get Option Plus tool in all stocks or every contract.Actually,Option Plus is enabled while taking liquidity and volume of the concerned stocks only.So,you will need to check that before you decide to go for option Plus.
Moreover,we always keep stressing that you should go with high cash leverage products like derivatives only after properly understanding the risks associated with these trades and analyzing your risk profile beforehand.ICICI Securities is providing the Option Plus product.You can check out with broker if they are providing Option Plus.