How to reduce option margin

Algos, strategies, code
1

Hello,

Could you please shed some light on how to reduce the intraday option margin?
Example: Buy BANKNIFTY 14TH FEB 45500 CE - Price = 500 - qty - 300
sell BANKNIFTY 14TH FEB 45500 CE - Price = 505 - qty - 300
stop loss BANKNIFTY 14TH FEB 45500 CE - Price = 497 - qty - 300

If I add stop loss, then the total margin will be 17L. I need a stop loss order, but it is considered a naked order. I am placing each order as a separate order as the BO order is no longer available.

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2

This isn’t possible if you’re trying to place MIS orders.

You can make use of NRML product in this case, enabling you to treat 2nd and 3rd order (Target 505 and SL 497) as OCO GTT order* without additional margin.

*Recommend to understand basic function of GTT function first before using the same to avoid inconvenience of order not executed when triggered: Introducing GTT – Good Till Triggered orders – Z-Connect by Zerodha

3

Thanks for the reply.

Is it possible to do it via algo API? Will GTT orders be as fast as Normal and MIS orders?

Are there any API limitations for GTT orders?

4

For API-related queries with Zerodha, best to check or post on Kite Connect forum: GTT - Kite Connect developer forum

GTT orders are sitting in broker’s server until trigger price is breached, meaning limit order (Target or SL) is sent to Exchange instantly post trigger. The execution depends on how you set trigger price and limit price. BANKNIFTY is generally volatile, so the wider gap gives the better chance of execution.

5

Thank you. I will check it.

6

@Aoz I have tested the GTT feature, and it is not suitable for intraday scalping because of the delay and no guarantee that it will trigger. Is there any other possible way?

7

Not really. Earlier there used to be a Bracket order that supported this, however, this was discontinued years ago due to an issue with triggers during high volatility. You can check this post.

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