I have 2 accounts with Zerodha. I use 1st account for cash position and 2nd account for FnO. I have 500 shares of Amber in 1st account and shorted 5 lot of CE 8800 July in 2nd account and also shorted 1 lot PE 6300 July. Now I have received an FnO violation email from Zerodha. Do I necessary need to square off to avoid penalties ? I don’t want to Square off if possible.
1st Account: 500 shares of Amber Enterprise
2nd Account: Shorted 5 lots of 8800 CE & Shorted 1 lot of 6300 PE
Is there anything I need to do… like buying 4 or 5 lots of 9200 CE of June / July to reduce impact. Pls help soon
If you want, you can exit the position completely. Otherwise, you can continue to hold your existing position as long as you do not increase your Delta OI. Any new trades should not result in a higher Delta OI than your current base level. The notification you received is just a general alert from our side to nudge clients and make them aware of the Delta OI limits.
Penalty will apply only if the Delta OI limits are breached. As long as you stay within your base Delta OI, you can continue holding the position and even take additional positions within the permitted limit.
I prefer to NOT square-off existing positions. My understanding is that any increase in delta due to underlying stock price movement is considered passive breach only and is Okay. The problem starts only if I place trades to increase my delta in the direction of my base delta.
Just want to confirm NO penalty for any delta increase in the same direction solely due to stock price changes (without any fresh trades)
@Adarsh_Patil Based on your response, I did not place any new orders in Amber during last few days of FnO ban despite open positions. Is there a way to 100% ensure that I did not get slapped with any penalties
Just do not violate the rules. As long as you are within the limits, you won’t be penalised. Also, the delta OI rules are not meant to penalise anyone. They are there to help you hedge your positions more effectively.
@Adarsh_Patil I agree but my only worry is regarding my existing positions in Amber. My course of action during FnO ban in Amber has been to not close any position nor take any new position (including rollover)
