I have read few posts here where traders question the intent of zerodha in allowing only limit orders for stock options. No doubt there are few cons associated with this. But am sure there are many who have actually benefitted from such a feature. This one feature has saved me at least 10k over a period of 1 year. I just felt I should share my instances because the intent of the broker is underappreciated.
I am mainly an option seller trading in both index and stocks. My usual trades are with nifty and bank nifty and I always go for trade at cmp. It doesn’t make much difference since these are liquid.
Today I wanted to sell HCL 1000 pe Sept expiry. The bid was at 3.3 and ask at 6. I was ready to sell at 5.8. But because of brain freeze I accidently placed market order. Technically my order should have executed at 3.3 but then it was rejected and asked me to place limit order. A clear difference of 2.5 points for a lot size of 700.
This has happened before too because in the last week of previous month of expiry the liquidity in stock options isn’t very high.
Another instance I remember me where I had simply put an order at a very high value and it got triggered probably because the buyer isn’t a zerodha client. Few monthly back when cipla was at 850 I simply placed 700pe sell order at 6. The previous days closing was at 1.5 and there was no liquidity. At the end of the day around 3.20 it got triggered.