The market is abuzz with rumors that the new margin policy is going to kill the traders and brokerage houses. However, one must see that each coin has two sides, and let us focus on the positive aspects of the new margin policy.
1. Non-serious persons will be out of the market.
2. Petty options of Rs 1-2 will be out. Hence don’t try to beat the margin system by hedging through small priced options because the same will not be available.
3. Many brokerages will be out of business, which was till now thriving by giving even up to 100X leverages.
4. Many users of Option Plus or like the platform will be saved from daily hitting of SL and will become profitable. Instead of generating income for Brokerages, they will generate income for themselves.
5. Productivity of organizations will increase, now part-time players will concentrate more on their regular job.
6. Hobby always demands money and business always gives money. If one is treating option trade as a hobby then he should leave at the earliest possible occasion, provided he has enough money to finance his hobby.
7. Business requires enough capital. The small capital always eats itself. Options writers must plan their business model in that way. The adjustment of position turns a losing trade into a winning trade.
9. Have reasonable profit expectations. The biggest Indian Co is having ROI of 10% only and that is also only on the historical cost which is Rs 600 per share. If you take the present price of Rs 2000 then it is only 3%. If one wants to be among profitable group then you should have a target of a reasonable profit. Only horse races and smuggling gives a return in multiplications.