Regarding: RMS:Rule: Option Strike price

We sometimes get this error:

RMS:Rule: Option Strike price based on Ltp percentage for entity account

As I understand this is because of the dynamic percentage from the spot, but many times this percentage is very low

At the time of writing this, the limits are as shown below when Nifty Index is at 9039.

Nifty contracts allowed for trading: Current Week- 8900 TO 9200 CE & PE
All other expiries- 8500 TO 9550 CE & PE

From my perspective, this disallows safer deep OTM strikes which are 2SD (95% OTM probability) for a monthly position. And based on the current week limits it disallows even 1SD/68% OTM prob strikes. Even if we could get the strike for the option sold, it is usually very close to the limit and makes it impossible to hedge it because of this limitation. And further with the June2020 margin reduction, these kind of hedged trades become more profitable.

BharatW gives an explanation on this forum:

If I interpret this correctly, this happens because Zerodha as a broker has become too big - is that correct? If yes, how does Zerodha plan to resolve this?

From june 1st, new rules are coming out for hedged positions, we believe if this goes through market OI will increase and thus our OI.
Also SEBI has put limits on FPI trading in FNO due to current volatility, this limit is upto june 25th, this rule has limited OI in market and once this limit is lifted we believe markets will add more OI and thus our limits will go high.
Also we have tied up with orbis and clients who trade in fno and mostly option buyers, we are moving them via custodian route if they are interested, doing so will taken out OI on our books and adds to custodian book.

why the clients would be interested in so ? what is the incentive for the clients if the clients do so ?

They won’t have any restriction on strikes.

@siva How does one get started with Orbis? Do we place orders on Kite or their platform? Is it an option for option sellers?

On kite only, option sellers have no restrictions on current scenario also. If you are big volume trader then let me know.

Not a big volume trader. Is Orbis still an option?

Can you email your details to jawaad.khan@zerodha.com.