Few days back I made a blunder in FinNIFTY monthly expiry option buying.
I wanted to create a calendrer Spread, So I put a limit order for 20350 PE Aug Expiry buy (Current price whatever was showing was pre-filled in kite) and Sold the 20350 PE current Expiry.
Since Monthly 20350PE Strike was not liquid, it got executed at 412 Rs. after which there were no buyers at all so that I can exit that mistaken trade.
I completely agree it was my blunder, before placing I should have checked those and all but is there any option in zerodha by which, when it is turned ON, I don’t want to be only buyer in that strike or any workaround to avoid this blunder in future ?
its not that there is no buyers, on expiry day weekly expiry option follows index, monthly option follows future so it will look like trading at discount. there is bunch of arbitrage bots waiting to buy options even at 1rs discount to future.
about workaround:
if for some reason there is no buyers at Intrinsic value, So to not loose Intrinsic value, after u exit short position in calender spread buy a deep in the money call with 99%+ Intrinsic value or buy future and hold it till day of expiry. any direction market moves you dont loose or gain anything. on exipiry day put discounts will be gone, you can exit or let it expire.