Yes its violation. If we also couldn’t able to close due to liquidity issues, penalty will be levied to client until the position got closed or till the delta level reduces.
1 Like
Will you not attempt to close it ? I see no relation between bit and ask ? For example 1bid 100 ask I see this kind of depth
We may attempt to close it but the execution solely based on liquidity. If clients trying to increase the delta even after seeing the nudge its completely his responsibility to close other side of the position to avoid penalty.
2 Likes
True! But it doesn’t help you figure out if you are going overboard while covering / squaring off existing position resulting in sign change, especially if you are in a multi-leg strategy. Base FutEqOI is still required.
In a multi-leg strategy -
Earlier - If you were squaring off and exiting - OI was not increasing. It was the only option.
Right Now - If you are squaring off and exiting - FutEqOI can increase resulting in penalty.
Current FutEqOI reference doesn’t help in this case. And frankly, its a bit misleading.
Thanks for the feedback, we’ll review this and see how we can improve the handling and clarity around FutEqOI, especially in such scenarios.
1 Like