If i want to make a Bull Call Spread ( Buy ATM Call/Put and Sell OTM Call/Put ) do i have to place only in basket order or i can place the order individually.I mean, shall we place the buy order (as buy limit order at the desired price) and then place the sell order.Also can i square off both the orders (both buy and sell) at the same time or do i have to exit the sell order first and then the buy order.If i do that in reverse (like exit the buy first and sell second) will i end up in paying penalty. Kindly advise.
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You can place the orders individually as well. But using basket order will give you idea of margins required for placing these orders before hand and it’s also easy to place multiple orders at once.
You can square-off both the orders at same time, but would advise you first square-off short positions and then exit the long position, this way your margin utilization will be in check and there won’t be any risk of margin penalty.
Thanks for the reply @ShubhS9 . One more thing, is the freak trade issue still exist ( price moves abnormal level for fraction of seconds). Because in basket order, we can execute the credit spread strategy easily,but don’t want to endup as a victim of freak trade by placing the market order.
There are possibilities of freak trade when you place a market order. Best way to tackle this is to use limit order, which you can use like a market order as well. Here’s how:
During the live market ; Freak trades are observed in options . But . Not in futures or cash equity .
Am i right ?
has any1 faced/observed freak trades during live market in futures / cash equity ?
Freak trades can happen in Futures & cash also…
One of my friend got a minor freak trade in SL-M order on Poly Medicure on 03/12/2021.
Freak trades happen , if you script is illiquid
Freak trades on the opening candle is common . what i asked : has any1 faced Freak trades during the market hours in futures and cash equity ?