Moreover , you need to replenish the amount when it falls below the minimum level .
If you are using services of a broker , then you can place orders online or on the phone .Mandatory deposit called margin money covers an initial margin and exposure margin which acts as a risk containment measure for exchanges and preserves the integrity of the market .
The initial margin is adjusted every day based on the market value of open positions .
Exposure margin is used for controlling volatility and too much speculation in the derivatives market meaning .
The delta of the barrier option jumps when the spot price reaches the barrier .
The price of the vanilla put drops and the option ends up out of the money . If the underwriter of the barrier call wants to be gamma neutral and he hedges the gamma risk by buying and selling the vanilla option , this action might also influence the market of plain derivatives and implicitly the level of the implied volatility .
Therefore , a further step in developing the above model is to incorporate the effect of option traded volume at the level of the implied volatility .
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