I am currently having Zerodha. I am not an HNI client, I have a limited capital. Sometimes when markets are volatile like 2021 I am facing restrictions with buying OTM options which is effecting me a lot. So can anyone suggest me good discount brokers without OI restrictions ? If anyone is using any other discount brokers please share OI restrictions in the broker.
yahh i am also looking for other broker which have no oi restrictions .Can someone suggest me good broker
Angel broking, Alice blue
is 5 paisa broker good ?
Alice blue also has restrictions when it comes to Intraday option buying.
If you want to buy overnight you are allowed for all strikes, but what you cant do is buy it NRML today and change it to MIS the next day to get hedging margin benefit against another sell position in MIS. i.e. If you have carried an option buy position as NRML overnight you cannot change it to MIS going forward.
There are complaints about Alice Blue and Angel Broking. e.g. https://www.youtube.com/watch?v=ibcXWNIVoMw
I have opened a backup account with Fyers. If Zerodha does not resolve the OI issue by Sep 2021, I will slowly shift my trading there. So far no issues with Fyers. They have direct Mututal fund investing, desktop trading platform, Free API. Their web trading platform has some good features and some features are missing which is provided by Zerodha. I am used to Zerodha and will continue to use it provided they solve the OI issue by Sep.
I was of the view that with the revised margin rules, zerodha can come out of its oi restrictions. But, saw the allowed strikes today (only two strikes allowed in banknifty) and understood that this problem will only increase with the full implementation of margins from sep.
Previously traders had incentive in the form of extra leverage to go to lower quality service brokers.
Now that the margins provided are equal across the brokers everyone will flock towards the top 3-4 brokers and this situation will continue to persist even after sep.
So, there is no point asking to do something which seems to be beyond their control.
@Krishnaaditya @Arpit_Sharma2 @yabita_padung @Prateek_Malpani @teenscm @Ratna_sai_kosuru Hai friends Zerodha is not allowed to buy option , i am seriousely looking another broker , I need those broker will accept direct mutual fund as colleterial , i am waiting for PAYTM and GROWW to accept colleterial , i already spoke to them they told we are working fast to accept colleterial , GROWW is adding customer as fast , i have big amount in zerodha , now i dont like zerodha because of i cannot hedge here , every month i am paying 40k as brokereage , seriousely i will move to these two brokers , zerodha is not helping to his own client , zerodha itself buying all option there are lotting the clients now
But sir, if you have a sell option position you are allowed to buy equivalent option, isn’t it ?
My 2 cents on it.
The problem would only worsen for Zerodha in the near term as more people (small retail) will move to option buying instead of futures or cash. Hence having a more adverse impact on OI.
Possible Solutions (some long term, some short)
- As the competitors grow there would be some people who would move from zerodha and that will help zerodha OI to reduce.
- As the overall market grows (due to more people moving to options) the 15% quota for zerodha will become bigger
- As already mentioned by @Stonecold you need to sell options first and then buy. Yes, this would mean that you would need to have full margin first. A workaround that I found out was to take positions in tranches. So for e.g. if you want to sell and hedge 100 lots, sell 50 lots first and buy the hedge for 50. then repeat the same for 30 and then finally 20. This way you can get the hedge benefit and not go into peak penalty.
Reasons why I still Zerodha inspite of this issue and would not like to change
- Their api is the best and most stable, agreed its paid but worth every cent
- The transparency on charges and what’s allowed vs not allowed is astounding. There is no fine print or *terms & conditions apply. You know upfront what you are getting into
- The support on this forum is unbelievable. Any question, any input (inspite of it criticizing zerodha) is entertained here. The effort and speed that @siva, @ShubhS9 and Nakul have to reply to query is amazing. Love these guys they will always answer your query inspite to you asking stupid ones or blaming the org they work for. They always maintain a balance and help out everyone. This effort would not have been possible without the support from the top @nithin
- You are allowed to pledge MF and trade against it.
- Any change in rules, logic are informed to you way in advance and does not come as a surprise at 915am
After reading some might think I’m too biased for zerodha but this is what I feel. I have traded with aliceblue and profitmart and realized there are way to many conditions apply and rules change happens abruptly without any information.
Also be cognizant of the fact that you will have issues with other brokers as well. No one will be perfect and hence I have like a list of top 5 things (mentioned in the things I like in Zerodha) that are essential. Go for the one that meets the top 5 for you.
@Stonecold yes but what a problem is if i sold option on monthly , then i will buy weekly option to hedge , when the weekely option expire , i need to close , when i am closing margin will go on little bit negative i . then i cannot buy option on next week , i cannot hedge also , brokerage is unnecessary wasting here , so probably i will move to another broker this month , when i am not getting a benefit why i want to be here
i agreed every broker have some problem , but OI problem you cannot do business here , if you cannot do business then how they are good and neat is meaning less
@TradeB2B Try this, may be it helps. This is something I do to roll over my hedge.
- square of one leg, this would normally not increase the margin like crazy.
- buy the hedge to replace that leg
keep repeating in that order.
The range restrictions does not apply as far you are net short.
Another thing that people do is sell some really far OTM options. This makes them net short. Now buy the hedge you need and then square off the short position. As its far OTM there is negligible price move impact. The only thing you lose is brokerage, but if qty is huge 20 per order will not be noticed.
@Prateek_Malpani this way only i am doing but brokerage will increase , when you square off next day avg price will gone , but brokerage will go long in long run , i dont like it
Do they allow to pledge as well those Direct mutual funds ? D you have the list of funds there?
Yes, they have pledge facilities for stocks and Mutual funds which are approved by Clearing Corporation.
No pledge charges.
There is no requirement of 50 percent cash for overnight FNO positions.
All the statements were in context of Fyers and not Zerodha. Please see the previous posts.
Thanks for the info:
- Do you Fyers provide API and how reliable it is?
- How longs have you been using Fyers?
- Is System stable in Fyers ?
- Also OTM options buying is allowed there?
If everything is Positive then i think its really tough competition to Zerodha!!
Are you sure? On Fyers forum there are discussions about 'what would be considered cash collateral". Why would those discussions happen if there is no requirement for cash collateral?
Fyers provide API free of cost. I have not used it. They have tie up with some Algo providers also where you don’t have to do programming like Algoji, Tradetron. Algo trading is grey area for retail traders as per SEBI regulation.
I am using it for a month almost
Yes, no hiccups so far. There is an issue of loading watchlist with the last week release on web version. But, if you do a refresh of the page, things are back to normal.
Yes, no restrictions.