Cover Order for Options

I know that as part of a Cover Order, placing a stop loss order can reduce my margin requirement.

  1. Is this feature available for Options (Seller only). I know it is available for All Futures and Commodities.
    If NO, Why not?
    If YES, Can I place a stop-loss wherever I want e.g 30% OR Is there any guidance for coming in the ambit of Covered orders. e.g cannot place SL greater than 10% etc.
  2. Is this valid for only intraday? I know MIS is Intraday.
    If NO, Can I use CO for carryover (with margin) instead of NRML.

I found the NOTES section in this link very useful: https://zerodha.com/policies-and-procedures

CO is not available for Options, (I supposed MIS can be used for Intraday)
CO and MIS are both intraday and are squared off automatically at the end of day (3:15 for Equity and Options, 3.05 for Commodities and 4:30 for currency)

Only NRML can be used for carryover with 100% margin requirement.

Hey,

  1. Cover order is available only for NIFTY options, & isn’t available for Stock options & Bank Nifty.
  • Not allowed in BNF due to exchange mandated Open interest limits
  • Not allowed in Stock options, probably due to high volatility & lack of liquidity.

& you will be able to place the SL trigger only between the range specified which varies per scrip.

  1. Cover orders are valid only for Intraday trades.
2 Likes

A little too late XD!

1 Like

Trigger is in range but still rejected --1st leg was rejected so cover oder …

Hello,

I have a doubt regarding this; let’s say I bought 31500PE of current week expiry at 300 NRML and let’s assume it started moving against me, can I place Stop loss order @ 250 and also a target order at 350 (only if it starts going in my favour)?? Can this be done in options…(I know it can be done in equity)

Thanks in advance

Can be placed only if extra margins are available for one leg of sell order, as you have long position one can place either target or stoploss, to place both extra sell margins are required because there is a chance that both get executed and result in short open position. One can use BO order to place both sl and target at once on nifty and banknifty options.

Thanks Siva …