The most trader who buys otm never square off their position when the otm strikes become atm.(by retailer logic). When it becomes atm how zerodha allows the same strike when it gets atm.
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No, traders likely books profit if they turn ITM but will leave if they move more OTM or lost time value as additional loss by leaving is very limited. Also as mentioned above by Nithin we allow ATM because it require more premium to buy compared to OTM.
How long does it take for ATM strike in Banknifty to become OTM and out of OI range?
We are seeing live examples and thus I would suggest you look at this through our perspective for once, instead of trying to play a straight drive on a rank turner.
Like you said when an otm becomes itm, the buyer sells their bought options. At the same time the otm seller will close their sold position by buying option.
Un the above case 2nd case happening more than 1st case. You can verify by anyday OI decrease when a strike becomes itm. My question stands again why zerodha opens a closed option strikes when it gets atm from otm ?
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Do you even believe a word they say
They have such kiddish excuses and I feel sorry for traders who continue to hope
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I never believe them but I like the way how they are creating new one sided theories for all our questions.
Simply saying every entry level traders knew that, the brokers donāt want clients to hedge their postions by buying deep otm options so they block otms as much they can.
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Today we saw 200 range in BANKNIFTY and 150 range in nifty
That means that they are allowing hni to take positions or they are allowing huge shorts to build up there and they have lesser fear of short squeeze if more and more brokers add restrictions
Zerodha should ensure they donāt add more clients if they are are already having 15 percent of the market share
Why onboard more accounts when nobody knows if all strikes could be restricted for the small account traders
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2nd trading day of weekly option itself all strikes are blocked, but they make ATM strikes never get blocked for 3more days. They have no limit breached when it becomes atm. Now their theories on sebi and nse rules never applies to them.
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@nithin
I understand that if I sell first then I can buy equal or less quantity even with OI restrictions.
Your basket order understand the spread for margin. Can it be modified to take care of this scenario too?
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Not possible for now.
What is the remedy for the OI restriction. In June, the peak margin requirement has also increased. This is another bummer. I donāt know why they need full margin for intraday especially when someone can have SL for all the intraday orders.
Earlier I used to sell MIS, buy hedge and then convert short MIS to NRML. Now, to have the same setup I need to punch multiple orders ( 2 lot sell/buy (hedge) ). It is becoming more time consuming and slippages also occur. It adds to the brokerage cost which at one point of time was the USP of Zerodha. If this is not fixed in the near future, I will be migrating to some other broker. I really like Zerodha, but with the new margin requirements canāt handle the OI restrictions.
This thread is height of patience.
14 months on, niether SEBI nor ZERODHA gives any attention to āblocking OTM optionsā.
But irony is, people are still hopeful something will happen
I understand that if I sell first then I can buy equal or less quantity even with OI restrictions.
Your basket order understand the spread for margin. Can it be modified to take care of this scenario too?
Please do thisā¦ It is much required.
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Canāt buy otm and then short to create a strategy due to oi restriction, canāt short first and then buy otm due to margin issues!!! What is the workaround to this?? Anyoneā¦
Thanks
Reminds me of the nostalgic 90s when I used to train travel. Sometimes IRCTC used to block entire train cars for their guests in the name of special or advance reservations.
Conflate that feeling with option buying on Zerodha, thrice told.
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zerodha allowed all strikes for MIS product typeā¦is this permanent feature or only till september 2021?
and can we convert mis orders to nrml order in this case? @siva @ShubhS9
Permanent.
Not allowed.
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not even in case of hedged position?
@siva It shall at least be allowed to the extent we have short position in Normal. Good idea though to have this implemented.
Yeah, thatās the plan.