Strike price is outside the allowed range

@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. :wink:

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 -

  1. 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.
  2. 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

  1. OTM buy for hedging purpose
  2. 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
  3. 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.

Ok. If I understand it right what you are doing is this -

  1. Take 4 legs of Iron Fly in MIS in the morning.
  2. And then around 3:15 you might be trying to convert these 4 legs into NRML mode.
  3. Zerodha won’t allow you to convert MIS to NRML for long positions because of this.

And before, you must be used to doing this daily and hence expect your strategy to work not just on 100% of your available margin but on 125% for intraday and 100% overnight. We are all in the same boat and I used to do the same. But since last year every three months those peak margins are increasing which will become 100% in Sept 2021. Hence MIS will have the same effect on NRML as far as margin is concerned. Therefore, the point I am making is going to ORBIS or any other broker will give you this edge for only 1 more month.

Now, I simply take 4 legs of iron fly all in NRML to begin with. If you are saying that this is also not working and I should give it a try on Monday - Sure. Will make an iron fly around 34500 in NRML and check. Doesn’t look like a bad trade either … :wink:

Regarding this, I can help with few tips -

First don’t use Chrome - Use Opera or Microsoft Edge. Chrome is built largely on cacheing system. It stores everything as cache. Which makes everyone feel its awesome and fast, for it only uploads most of the things from local and 99% of websites hardly update in a month. But we as traders want realtime data that gets updated tick by tick making cache largely unnecessary. If you still have to use chrome, go to Inspect Elements > Network and Disable Cache for better performance. And off-course, delete the cache at 9 AM on daily basis.

Secondly, SSD, 16GB ram and 10th Gen Intel, is all good - but your real hogs are multiple active screens - 5 to be precise. When you have active monitors like that - they all are subscribing to tick by tick data. If you have marketwatch or chart in all the screens you are subscribing to 250 products tick by tick data simultaneously along with your active positions. If you had one screen only the active screen will subscribe to tick by tick data. Plus, just by having multiple screens doesn’t allow you to see multiple screens simultaneously. You are still looking it one screen at a time. Why not have one screen and use - CTRL + TAB. But I understand, this is personal preference.

Thirdly, load balanced ethernet is detrimental to trading. You need priority not load balancing across devices in your home. A load balanced ethernet will give equal bandwidth to your kid watching netflix on tv and your trading system. But repercussions on trading delays can be huge losses against a Rs. 799 netflix plan.

Hope this helps and you see this through … Cheers!

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Able to perform iron condor in BankNifty in NRML mode by opening short position first in CE and PE.

image

What was the time lag , u did face , while executing between short and long ?

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Ok, lets up the ante.

moderately bullish iron condor.
steps to enter.

  1. call debit spread first (near otm)
  2. call credit spread second (far otm)

similarly moderately bearish condor

I will explain why these strategies are important first and then the issues while execution. I have been doing this regularly, but from May 2021 zerodha will not allow the credit spread leg which is far otm.

This revised iron condor will help when the market is trending, IV is high - you enter into the debit spread. If this spread becomes in the money or atleast a scratch then enter the credit spread to lock the profit. And this has to be done only on the weekly expiry BN or nifty as the time decay is on your side.

You can keep doing this week on week because the gap between both the spreads will ensure you run profitable everytime.

Also if the market reverses your loss will also be lower as the credit spread will protect you.

Since i was doing this trade regularly, i know it wont get executed with the new OI issue.

@siva can you confirm if this trade will work out smoothly or not?

Because of this problem - i am doing an improvised ratio strategy to remain profitable or hit 90 out of 100.

PS: i did not want to disclose the strategy on the public forum as i am no financial advisor or planner. I am trading for my own passion !

Short answer: No. It won’t be smooth.

What you are seeing in the pay-off graph looks like a pay-off graph of iron condor but that is where you are mistaken. Iron condor is essentially a credit strategy but what you are doing is a net debit strategy.

From diagram 1: Moderately Bullish
Debit Balance = -167.55 - 30.35 = -197.9
Credit Balance = 130 + 41.4 = 171.4
Net = -26.5 (Debit)

From diagram 2: Moderately Bearish
Debit Balance = - 157.85 - 35.25 = -193.1
Credit Balance = 128.2 + 43.6 = 171.8
Net = -21.3 (Debit)

So de facto - you are no longer hedging and this will increase the OI and that is why Zerodha won’t allow you to do that because of their broker limits getting reached.

P.S. Yaar, aap pehle khulke batate … would have saved me a lot of write up and beating around the bush (MIS, Orbis, Peak Margin, Iron Condor, Desktop app, etc.)

But bottomline: yeah … zerodha is hitting OI limits and they can’t do anything about it … orbis is the alternative but it won’t let you meet your collateral margin return targets. So other broker is the way to go considering what you want to do and the current regulatory limitations on Zerodha.

Have a good one … Cheers!

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@abhiwin123 When you look at the whole picture its a debit strategy

But when you closely analyze, it isnt. Let me try to explain.

I get into the debit spread first. Wait for it to go ITM or scratch. As soon as its that - its no longer debit - because i am not loosing anything.

Now to double up the profits i sell a 400+ point credit spread.

Zerodha allows you to do any number of debit spreads, OI restriction wont apply. If BN is at 34700. I can do 37000/37100 CE debit.

ie sell 37100 CE first and then buy the 37000 CE.

My problem is they dont allow a credit spread. So basically what i am trying to say is, as it stands the platform gives an edge to the option buyers - not the sellers.

And i get your point. Its time to move on !

Can you give me the legs involved here?

-10 x Nifty 15200 PE
-10 x Nifty 15400 PE
-10 x Nifty 15800 CE
-10 x Nifty 16000 CE
+20 x Nifty 15000 PE
+20 x Nifty 16200 CE

I tried above and all the buy orders were rejected. (Buy orders are blocked for this strike price due to [open interest (OI)])

It is simple, we allow same number of longs which are equal to shorts, irrespective of calls/puts or expiry.

Yes I understand that and if you see number of buy is same as number of sell but still order won’t be executed because sell order is open.

  1. One needs more margin when placing trades at Zerodha, because we have to first place all sell orders
  2. If we don’t have margin then we have to divide one trade into several smaller ones for eg sell 2 then buy 2 then sell 2 then buy 2.
  3. When sell order is there in the basket, system should allow buy order.

Right, we have been agreeing to that.