Allow Hedge positions to be bought outside the OI range for short positions other than current week expiry

@nithin @siva
I have already discussed the issue of OI range with @siva in detail.

I have hedged long and short positions. Mostly the short positions are of next week and hedge it with current week expiry. On expiry day, With the new margin rules, it is no longer possible to get margin benefit by converting the short positions to MIS.

Zerodha allows hedge to be bought for short positions. A simple solution to the above issue is on expiry day do not consider the hedge of current week expiry and allow options to buy for hedging short positions other than current week expiry.

e.g. today is 10-Jun-2021
Current position
short 16200CE 17-June-2021 10 lots
Long 16200 CE 10-June-2021 10 lots

Due to the limited margin in my account, I cannot square off the Long position. I cannot buy next week expiry option to hedge for margin benefit due to OI range. What Zerodha should allow is on expiry day, allow hedges for short position other than current expiry to be bought without considering the current week expiry long positions.

In the current scenario, I have to rebuild my positions, either 2 or 3 lots at a time. This increases my turnover and the brokerage charges. It’s a kind of unwanted loss which Zerodha is not going to compensate.

If the suggestion given above is not possible, I will have no other choice but to migrate to another broker. I simply can’t cover my short positions and increase the trades.


1 Like

This makes a lot of sense… zerodha should implement this to make it easier for hedged traders. This can probably be done from wednesday itself. Or something simpler to implement like allowing to buy 1.5x times the sold options.

Even better would be 2X the short positions. This would cover the shorts by 100%. one set for current week and the next set for next week.

The sad part was that I was not able to sell my current week Puts as there were no buyers for it. I submitted the order at 3pm and still it was not fulfilled. In the end had to cover my short positions to prevent any kind of margin penalty.

@siva @nithin can you allow 2X option buy against short position at least on Wednesday and Thursday or as per my initial suggestion? I could not manage today’s expiry. I don’t want to leave Zerodha, but with my strategy I am not able to trade with the Zerodha OI restriction.

We can’t do anything about this, limits are set by regulators and we have to stick to them, we have tied up with orbis also to move some OI to that and you can also move to orbis if you don’t want any restriction on strikes but it comes with couple of disadvantages like eq trading is not allowed for now and no pledging.

We are hoping once SEBI lift the restrictions on institutional directional bets which are set in last march to control speculations market OI should increase and thus ours.

When do you expect this to be resolved. It is hard to believe that the #1 stock broker of India did not envision OI restriction as a significant risk to business forcing customers to migrate to other brokers.


I understand that options outside of range can only be purchased as hedge. so if I am short in future, I can buy OTM call as an hedge.

but I do noticed the same is not true with synthetic future.

So I had bought ATM put and sold ATM call basically synthetic short future. since my risk on sold call is unlimited I want to buy an hedge i.e. OTM call. but system doesn’t allow me to buy as my net count of position is zero positive quantity of put and negative quantity of call.

This is limiting my risk taking ability and also impacting the margin requirement. Please do suggest what can I do at my end. and if the scenario hadn’t been handled at your end, request you to please do the needful.

@nithin @Technical_Help_Suppo

Only thing you can do is change the broker.