Abroad, there are separate exchanges for derivates. Liquidity is required even for the options and futures market, whether it involves money or shares. Equity holding patterns of Indian companies show a concentration of shares in the hands of promoters and institutions. Public holding is highly fragmented. Writing of a stock option would essentially require underlying in terms of shares and empowering the holders to write such options.
Naked options can, in fact, be more dangerous than our traditional blank sales.
Margin mechanisms are far more stringent and whether our stock exchanges are equipped for options trading is anybody s guess.