Nifty option is most liquid options contract traded on NSE, having daily average turnover of about $16 billion (Rs.80,000 crore). Nifty options is shorted when a trader believes that option is going to expire worthless, such time its best to write nifty options rather than going long. Traders short sell nifty options when they see nifty future to be trading in a range and will continue for some time. In such ranging market environment nifty option trader can short sell out of money nifty call option and out of money nifty put option. Let me show you how much margin is required for short sell nifty option, in other words its nifty option writing. Short selling nifty options require margin of nifty future, ie if you want to short sell nifty option you will require Rs.30,000 for executing your trade. This is because option writing has unlimited risk, while limiting profit to premium received at the time of short selling nifty option. But if you have hedged position with help of nifty future then margin requirement will be much lower, margin also depends upon the broker you are using.