Intraday options auto square off doubt

F&O
1

Take an example-

  1. I sell 1 lot of BANKNIFTY OTM 23000 PE on the expiry day as an MIS order.
  2. At the end of the day i.e around 3:15 PM, I want to square off this position but there is no seller for this particular 23000 PE strike price.
  3. What will happen in this case, since it should be squared off being it an intraday position.
2

Nifty and BNF options will have enough liquidity , nothing to worry abt there .

3

If you don’t square-off your MIS position before cut-off time, RMS will square-off it off, if the markets are volatile or if there isn’t any liquidity as you mentioned above then even RMS will not be able to.

In the scenario where you or even RMS isn’t able to square-off your position, depending on moneyness of the Option your position will expire either Out of the Money or In The Money and depending on this any profit or loss you make will be credited to / debited from your account.

Also, if you are Long and your position expires ITM, there will be additional STT of 0.125% charged on Intrinsic Value of the Option.

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4

Does this same thing apply if the day is not an expiry day?

5

If it is not expiry day and your MIS position is not squared-off, either by you or by RMS, then it will be carried forward to the next day under NRML product type.

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6

And then there would be margin requirement by Zerodha since NRML require more margin than intraday position?

7

If it is long position, you have already paid entire premium upfront so there will not be any change, for Short positions margin will be according to NRML product type.

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8

Just wanted to know are there any extra charges if even RMS can’t square off my intraday trade and have to take it till expiry?

9

There are no additional charges. however as mentioned above if you have long position and if it expires ITM, there will be additional STT charged at 0.125% on Intrinsic Value of the Option.

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10

Okay great, thanks for all the info.
This is an excellent platform for someone to get quick solution to their queries.

Thanks @ShubhS9

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