Across expiry.
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say I took long position in MIS (Intraday), towards EOD, I want to convert to NRML. Would it be possible if I have short position in NRML (same qty)?
or because it took in MIS I would not be able to convert to NRML?
Not possible to convert mis to nrml for longs in any case.
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The allowed range is extremely narrow right now, becoming a major problem in executing a desired strategy.
As a few others have already pointed out, even in a spread, taking short position first means I do not get the full margin benefit.
Making a trader take short position first also adds to the execution risk. For example when I am doing a bull put spread, what if the market goes down drastically before I can complete the long part of the trade?
I waited long enough, but now this has forced me to try with other brokerage house.
Also the first buy of long position is set to MIS by default, and I have to change it to “NRML”. I have to do this daily on the first long trade, even though I do not trade MIS. This is a minor irritant as of now, and costed me (luckily only) 4-5 trades worth of brokerage due to my lack of attention.
If only Zerodha can allow (small) traders to take at least a few (<20 lots for example) long positions without any strike restrictions!!
I have evaluated Upstox, Fyers and Finvasia.
Upstox had lot of issues. I closed the account after one month.
Fyers brokerage is similar to Zerodha and also provides refund in case you win 30 days challenge. No OI restriction to buy CE/PE of far away strikes. Option Chain is available which is much better than the Sensibull widget. Some folks had mentioned about margin not being calculated correctly in Fyers. I have not faced such issue in the last two months. You can buy and pledge direct MF. No UI or platform issues, trading with a decent capital.
Finvasia brokerage is free, but the web UI is not good. Fyers and Zerodha are much better.
Zerodha has a good ecosystem: Console, smallcase, tradingqna (my fav), coin UI is much better than Fyers Direct UI, GTT, streak, sentinel, where the other brokers need to catch up.
Decide your priority and requirement and select your broker accordingly.
I will be moving to 5paisa in 1 to 2 months.
Nothing against zerodha - Infact they are very good - but they are good only for smaller traders. Also the varsity has offered many insights
I’d love to stay on with zerodha - but there are few limitations that will not let me stay profitable.
- you will not be able to do an iron condor due to OI restrictions (The safest option strategy worldwide). Your short positions will be in NRML and the long positions will be in MIS which will square off end of day. And you will end up owing a short straddle with unlimited loss
- There is a work around for this though
if you are willing to make some round trip trades ( approx 4 trips)
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I aborted my transition to orbis on the 2nd last step. The pledging of cash component MF, ETF is not available. And since i am just an options seller, there is no point in just parking the 1cr as just cash. 3% annual return would be Rs25000 monthly (why should i miss it ?)
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The desktop app is not intuitive (Pi)
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Although their brokerage is low Rs20 per order. Other brokers are willing to give Rs10 per order.
My trading style is to hit a win 90 out of 100. Trading only in BN. All monitors set up to chart only 1 index. Would prefer to be a specialist in 1 index than jack of many.
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With a 1 crore capital, one can easily create an iron condor in NRML by placing short order first and then buying further OTM strike.
If you pledge cash MF/ ETF, what is the percentage haircut you incur? If it is 8 to 10%, that doesn’t allow you to use your full capital in option trades.
Assuming your rate of return is 20% per annum, you will only make 18% from your trading and with 3 to 4% returns on ETF, you will end up with just 21 to 22%.
For one or two % per annum, you end up sacrificing option buying power.
When was the last time you had created an iron condor in zerodha?
Please do this trade on monday and let me know if you succeed
Short: 35400 PE and 35600 CE
Long: 35000 PE
Long: 36000 CE
Option buying power is not required because we enter the short trade first (only margin is required). For fire fighting you can keep 20% capital in cash
80% of your funds are in ETF giving you 3% guaranteed returns and 72% (90% of 80%)+20% = 92% of your funds are available for option selling
Will try this trade on Monday.
16 Rs [without pledging] vs 16.8 Rs [with pledging] on a capital of 80Rs.
Use any proportion of your capital for cash MF/ETF for pledging. My personal opinion is it doesn’t offer significant benefit.
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Nothing like that, we do allow those many number of longs of any strike prices in nrml equal to shorts. You can check it on monday and let me know.
We have stopped supporting pi long ago and we recommend users to use kite. Also it doesn’t make any difference now if one is trading on web or desktop.
Brokerage should never be a deciding factor to switch, considering the current rates. You can choose to move for ui/ux reasons or features etc or as you mentioned you were not able to trade OTM longs on index.
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#20210715779687 – Unable to convert from MIS To NRML
#20210625241563 – Option buy is getting blocked
Please refer and let me know what you think? I have attached all screenshots in zerodha ticket - If you insist i can post it publicly
Position can’t be converted from mis to nrml in any case, I have mentioned above on this thread.
One can add longs equal to shorts, irrespective of call or put. For ex: one has 4 lots puts short, one can buy 4 lots call or puts long, or 2 lots of call and 2 lots of put or some combination of that, any expiry.
@viswaram yes the same problem for me , i am also option seller with the capital of 1 cr , hedging in zerodha is very diffcult , i already open 2 company , one in 5 paisa ,another in fyers , fyers no need to have maintain 50:50 rule there , please give your opinion to move fyers or 5 paisa
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@TradeB2B is it possible to register on 5 paisa forum without a trading account there? I think there’s sm restrictions. I want to ask few questions on public forum b4 anything.
@viswaram - looks like no one wants to see you go man. 
Anyhow, I wonder why nobody mentioned this, but I hope you do know that maximum peak margin (100%) is going to be effective from September 2021. At which point, there will be no difference between MIS and NRML and that is going to be the same across all brokers. So if you move to Fyers today, your strategy will have a de facto advantage of using extra margin in MIS for one month only.
But Fyers did catch my attention when it mentioned this on its support page that -
- Fyers is one of the very few brokerages that allow the clients to use the entire collateral amount for taking positions without bringing in additional cash.
- The cost of pledge/unpledge is ₹0 (w.e.f. 1st March 2021)
Does anyone know, how are the pulling this off? They did mention -
Clients are recommended to maintain 20% cash balance in order to meet the Mark to Market (MTM) requirements (in case of losses) and avoid debit cash balance.
So has anyone actually got a Fyers account and verified that when they say “avoid debit cash balance” are they talking only about the MTM losses or the 50:50 shortfall from cash component of positions taken in FnO is also simply considered in debit cash balance. Or they are charging some interest on the margin utilised with more than 50% non-cash component?
If there are no hidden charges, this is incredible. However, I did not like when they said -
For Unpledge of shares, you’ll need to place a request by writing to [email protected] as the procedure is offline at the moment.
@TradeB2B - 5Paisa seems to be having a rule similar to Zerodha. They charge interest on the shortfall and 50% should be cash or cash equivalent - as per their support page here. But can you please confirm if in your experience, Fyers has actually obviated both these exchange mandated requirements?
brokerage is the least considered factor for switching. I was using geojit for 10 years before moving to zerodha. Zerodha lowered the brokerage 12:1 times.
The reason i switched from geojit to zerodha was trading view charts !
@abhiwin123 - yeah i dont want to go too. Lets give @nithin 0dha 1 to 2 months timeframe to fix the main issues highlighted
- OTM buy for hedging purpose
- iron condor or iron fly with far away strike. eg: if BN is at 35500 now - then the system should allow for 35000 PE buy/35500 sell & 35500 CE sell/36000 buy
- desktop app
If they can fix 2 out of 3 - i can stay
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As mentioned system allows those many longs which are equal to shorts for now. But yeah we are actively moving more clients to orbis now and also hoping sebi will lift restrictions on institutions on the limits they imposed last march to curb volatility in coming months, this move should increase overall market OI.
Desktop- not on our list to do.
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Not a user but I think they are doing it out of their own pockets.
This & the brokerage refund thing will probably only be temporary, till the time they get a certain number of customers. Just doesn’t seem financially feasible in the long run.
This is allowed if the entity you are hedging is in the same segment. I am pretty sure you are only talking about hedging BN and not stocks. So BN can be easily hedged in equal lots.
This is also allowed. You just have to ensure you take the short side first and then add the long side. And once you take a perfect iron condor or iron fly, your margin utilised will reduce by 70%, allowing you to do the same again.
This is like sticking to blackberry/nokia when the world is moving on to smart phones.
Just a question - are you doing some kind of ratio spreads when risk increases? Like to make things delta neutral, against 1 shorted ATM buy two OTM with 0.25 delta. That way, I can understand you might find things very difficult to manage.
@abhiwin123 you may do this trade on monday and inform its working or not. Of the legs - get into the short trade first and then do the long.
- expected results ( all 4 trades should be in NRML mode)
- actual results ( the short trades will be in NRML mode and the long trades will be in MIS mode). Long trades will auto square off at 3.25 ) making you unhedged
Do let me know on monday !
And yes ratio spread is something that works when IV is high and theta remaining is low.
Desktop app is required to improve the speed of execution. I am not telling kite is slow, its fast. But my chrome browser is slow. I use an intel 10th gen with 16gb ram and ssd and load balanced ethernet. But the order places 2 to 3 seconds after i press the submit button.
@siva I am eligible for orbis migration - but the pledging facility is not available on it. I might loose out 20k per month. (3% of 80L) simply without pledging
@Ragavendran_V - 20% return on capital is something i would dream about now. I feel lucky if i can outperform liquidbees by 1% consistently month on month.