Does anyone have any idea why the next expiry Future contracts are blocked for Silver ? My order is rejected stating that it’s due to the lack of liquidity. I contacted CC team and they replied that it is blocked by their risk management team.
I got the following similar thread where a person pointed to some other thread as an answer, which I feel is irrelevant.
Can somebody help me why it’s blocked by Zerodha ? and is there a way to get rid of this restriction ?
I agree it is risky to trade the far expiry contracts. But completely banning the trades by Zerodha is not at all a right solution. You may instead ban the market orders as you banned for options, this may help to some extent. You can also block more amount of the trader in risk category.
There are some traders who would like to have a far expiry position and hold it for several months. The current procedure is a great inconvenience to such traders. Please get this improved.
Hmmm, imagine this scenario where one has a far month commodity position and he doesn’t have the span margin in the account. Now the position should be squared off by the risk team but there are no buyers. Now the position has to be carried leading to an interest charged to the client and waiting for a buyer to show up.
I completely agree with you Srinivas. Maintaining sufficient margin in the account is the responsibility of the trader. Zerodha must raise the margin requirement to trade the next month or far month contracts. Risk team cannot impose a generic rule for all the traders having low to high margins in their accounts.
Consider the following case:
Silver Dec Fut expiry is by 5th Dec 2017, which must be squared off at least a week before. By this time, Zerodha has already closed all the contracts. On the other hand, the immediate next available contract for trade is of Silver Mar18 Fut which isn’t allowed for trade by Zerodha. So none of the clients of Zerodha can have any positions in Silver commodity at this point which is meaningless in trading.
However, banning the trades of far month contracts can be considered but my question is at least next month expiry contracts must be always allowed for trades.