Basket Order - Fut Long/Short

Hi Traders. I have a question regarding hedging futures in basket orders and how the margin benefit works.

For example, I want to go long on 1 lot of Bank Nifty Fut and I hedge it with 1 lot of PE.
*Req Margin is showing something around Rs. 1,70, 677
**Final Margin is showing is Rs. 54,176

I have Rs. 60,000 in my zerodha account. So will this order get executed?

You need to have the required amount in trading account, but final margin will be blocked

To place orders in the basket, you need sufficient “Required Margin”. The “Final Margin” is what will be blocked once all the orders are executed.

In the basket order sequence you can place order for buying Put Option first and then for Futures position. This way the margin required for placing orders will reduce.

Shubh Sir I have few more questions regarding same topic…

Now that you mentioned to put the Buy PE first for going Fut Long and Buy CE for going Fut Short the required Margin and Final Margin have become greatly reduced. Thanks alot for clearing this.

So…

Suppose I want to convert a hedged Fut position of MIS to NRML/Overnight…is there any conditions like extra charges or certain amount should be in demat or anything like that.

  1. If we convert MIS to NRML/Overnight today, can I exit trade tomorrow as per new SEBI rules or there are some conditions?

  2. If I convert MIS to NRML/Overnight today then tomorrow when trading starts can I convert it back to MIS and then exit trade or we have to exit in Overnight category only.

Thanks for replies in advance. Im trying to wrap my head around all of this to take a quality trade.

There are no changes for converting your position from MIS to NRML or vise-versa. Also, you can convert Futures position from MIS to NRML but you won’t be able to do so in case of Buy Option position, you’ll have to exit the position in MIS and then take fresh position in NRML, more on this here.

You can exit your position anytime you wish to.

You can square-off the trade in whatever product type (MIS or NRML) it is traded in. No need to convert.

1 Like

you can convert Futures position from MIS to NRML but you won’t be able to do so in case of Buy Option position, you’ll have to exit the position in MIS and then take fresh position in NRML, more on this

Regarding the above… what if I hedged a Fut position within the tradeable strike price for NRML? Will I be able to convert it then from MIS to NRML?

For ex: I decided to go Long on Bank Nifty Fut and hedged it with a buy PE strike of 36600. The basket order was executed as MIS.

As per Zerodha Margin Calculator page, Bank Nifty contracts allowed for trading Current Week-NRML: 36600 to 36800

So the MIS order for buy option PE was placed within this NRML strike. So now can I convert both Fut and 36600 PE from MIS to NRML or as per the rules I have to exit trade and take a fresh position?

Hello Shubh Sir,

Which position should I exit first from the basket order hedge?

The option Strike or
Nifty or Banknifty Futures