Brokers limit at particular strike price in F&O?

[hencjjsjahhaj]

How much of capital do they put at max?

[Jason_Castelino]

@hencjjsjahhaj

How much of capital do they put at max?

More than 10cr also. But not every time same strike.

[hencjjsjahhaj]

Can you share per strike max?

[Jason_Castelino]

@hencjjsjahhaj

Can you share per strike max?

Around 50k to 60k units of nifty. Am sure there are others with even bigger qty. nifty is liquid enough to accept it without slippages.

[hencjjsjahhaj]

Are they sellers? Because looking at charts and data it astonishes me that a buyer could actually pull profits that way.

[Jason_Castelino]

@hencjjsjahhaj

Are they sellers?

Sellers.

[hencjjsjahhaj]

Had me doubt my math skills for a sec. Thank God I’m still a genius.

@SK_1995 Let me clarify, I mean Option buyers in all of this.

[ShubhS9]

@PK123

a) Wrt options, is this limit applicable at individual strike level or on overall OI for NIFTY CE for a particular expiry. Say 20k strike NIFTY CE (Aug 2023 expiry) has 1,00,000 OI and total OI for NIFTY CE (Aug 2023 expiry) is 30,00,000. So if someone is trading 20k NIFTY CE, will the restriction be calculated as 5% of 1,00,000 or 5% of 30,00,000 (since restriction considers all derivative contract with “same underlying”, the underlying is NIFTY index here and the strike price is immaterial to the wordings mentioned in the rule)?

The limit is applicable on overall OI of all derivative contracts of that underlying, this will include Calls, Puts as well as Futures.

For example: if Call option XYZ has an OI of 100,000, the Put option has OI of 50,000, and the Futures contract has OI of 200,000. The the total OI is 350,000, the 5% client-wise OI limit is applicable on this.

@PK123

b) Does Zerodha’s RMS check for this 5% rule at individual level / 15% rule at broker level when orders are punched in by user? If the trade results in a OI exposure above 5% / 15%, will the order get automatically rejected?

The client-level OI limit is calculated at the PAN level by Clearing Corporation. If the 5% OI limit is breached, the Clearing Corporation will notify the broker, and after that broker will notify the client asking to reduce the position. If the position isn’t reduced by the client then it is reduced by the RMS.

[SK_1995]

@Jason_Castelino @hencjjsjahhaj @PK123 @Meher_Smaran @nithin @Sleepy_Weasel @VijayNair

Suppose with 60 crore capital, Can I trade with 6 brokers with 10 crores each at same strike price for call or put options ? Is it possible practically ?

If not, then anyone please suggest me as to where to go for trading or for any other means where I can get good return with my trading skills with Rs 200 Crore of capital ?

[hencjjsjahhaj]

As @ShubhS9 mentioned, you don’t need multiple brokers for trading as limits are per your PAN, but it can be useful if broker-level limits are breached.

You can sell Options or trade Futures, but I don’t think there’s any benefit of choosing selling over buying in case of Options, in fact buying lets you earn interest from banks for the difference amount. There are also expiry day selling strategies.

Is 200cr your total capital or merely a portion of it? Because I strongly recommend you deploy only a few lakhs from it to learn and scale up as you do better. In case it’s your total capital. There’s no advantage for having more capital unless you learn to trade well.

[hencjjsjahhaj]

I’m not joking about deploying smaller capitals at first, today you think you’re rich, tomorrow you may go broke. Tread carefully.

[Jason_Castelino]

@SK_1995

Rs 200 Crore of capital ?

Do you really have this money? Once you have it, let’s find a way together.

[SK_1995]

As you know, fund managers are deploying more than billions in share market. Forget how much I have, they are deploying thousands crores of funds.
My questions are directly related to them, how they are doing this and getting returns for their clients ?

[Jason_Castelino]

@SK_1995

how they are doing this and getting returns for their clients ?

You think they trades for 1000s of crores everyday? Do they trade in derivatives? And that too one strike? There are restrictions on derivative contracts for them. They can use them only for hedging purpose.