Not as of now, but if it a hedge then one can take using nrml only.
The only issue is that you will not get intraday margin benefit atleast till Sep
@siva,
do you have any time line when this can be possible.?
I want to take some hedge for my position by buying OTM put/call. Previously I was able to do it via MIS but now the MIS trades or not getting converted to NRML. so if i have a NRML OTM put/call already as a hedge and if i want to move my strike position it is not possible without closing the existing NRML OTM put/call.
Yeah, will check on this.
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This is what I observed today.
My current position is 1 long CE-NIFTY
I sell 1 PE-NIFTY, no problem as I am selling.
I try to buy 1 PE-NIFTY, it does not allow as I have 1 long CE.
Looks like It is counting PE and CE together while buying OTM options.
Zerodha really needs to start rationing OTM long options, at least allow a few (5-10 lots) in one account.
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If you trade using MIS there is no restriction.
If you are looking to trade NRML then you will be allowed to go long the same qty as your short position. It does not see the instrument Nifty/BN or CE/PE. It just totals net qty short - net qty long. If it is -ve it will allow you to trade else not.
A possible work around. Short one lot far otm (low price), this will make you short 1 extra lot, but the strike you want to buy and then exit the short position. This way you can get the long position you wanted. There would be some charges due to brokerage etc. But this is the only option you have currently
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Hope this message finds all of you well and safe!
This particular thread has been running for over a year on this forum without any resolution in sight which is highly disappointing, I have gone through most answers provided by @siva (each one of which fails to address the core problem).
Even though the issue has been brought up countless time, Iâd still spare another 2 mins to summarise the problem hoping it might make a difference:
Case: Trader wants to deploy a simple strategy called bear call spread
(Varsity Link: Bear Call Spread â Varsity by Zerodha)
For instance, heâd like to short Nifty 16K CE and cover the same with Nifty 16.1K CE, which would provide him with a hedge margin benefit
Problem: Zerodha wonât allow the trader to purchase the 16.1K CE under NRML, thereby the trader is forced to short first and then cover the same (as @siva highlighted)
However, the team completely disregards the fact that to short the 16K CE first the trader wouldnât get any margin benefit upfront as detailed with an example below:
- Margin available 1.5 Lakhs
- Position the trader can carry with bear call spread = 225qty NRML short and 225 NRMLqty long
But because of the inability to purchase the 16.1K CE first, the trader has to follow a tedious and costly process of shorting 1 lot first and subsequently covering it with 1 lot requiring the process to be repeated 3 times.
This simply leads to paying ~2-4X the brokerage for an extremely straightforward trade
I understand the SEBI restrictions in place, however, Zerodha can definitely find out a way to allow traders to deploy the entire strategy in a single trade or provide a workaround to convert hedged MIS bear call spread into NRML bear call spread basis availability of margins.
P.S:
- I have been patiently waiting for a solution and have paid brokerage amounting in lakhs over the last 12 months alone
- Orbis is not the complete solution since it blocks you away from the equity trading segment and doesnât allow the Pledging of shares (to avail ~50% collateral benefit)
- Iâve initiated the shift to another brokerage due to lack of visibility on a possible resolution in the future
- Will undoubtedly miss Zerodha, given its the platform I started with years ago and have loved the UI/UX despite any shortcomings
- Would probably come back once the issue is completely resolved
6 Likes
I have a solution as follows -
- Allow buy 1st in MIS and then short in mis. This is already implemented
- Allow to convert multiple position at once. For this both buy and sell position can be converted to normal and margin calculation shall be based on that. This can be a separate functionality and currently put with validation like buy and short same numbers to keep this simple but quick to implement.
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Yes, I am considering a shift too (and I too pay lakhs in brokerage), even though I love zerodha. I have raised the issue and possible solutions many times but zerodha does not seem interested in sorting it out or having a workaround in a timely fashion. Have to break up orders into smaller orders currently increasing brokerage and more importantly hassle for me as a trader.
May I know which brokerage are you shifting too? I have evaluated 5paisa, upstox and fyers and fyers seems better to me.
Yes, this is the solution.
We are aware of this but unfortunately noting can be done for now due to SEBI OI limitations, we are doing many changes recently, if you notice we are allowing all strikes under mis. Give us sometime to find a way to allow spreads.
I have been evaluating fyers for the last two months and did not face any performance/downtime issues. They have a powerful desktop application also. You can trade from charts and from DOM (price ladder). Fyers have quite a few pre-defined watchlist like index with its constituents. You can also create your own custom unlimited nos of watchlists.
To exit your open positions, I find Zerodha better. In Fyers, if you click on the âxâ symbol to close your position, it will square off at market order. Zerodha provides an order box with pre-filled qty where you can enter the limit price. Workaround in Fyers is to use charts/DOM and enter the quantity manually. This is change in mindset for users who have been using Kite for a long time.
There is no OI restriction in Fyers.
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@siva this is not a new problem. There are several alternatives which lot of users have suggested as you are allowing hedged position. But, unfortunately the response from Zerodha has been lack luster. Till the time, there was intraday margin leverage, it did not hit hard to the trading community. But now with almost full margin requirement, it is very difficult to trade with OI restrictions.
You can do contract hiring of few developers and get this developed in less than a month. I foresee lot of Zerodha opening accounts elsewhere by end of September if the issue is not addressed.
2 Likes
I think Zerodha will be more than happy to let go of a majority of small capital traders and focus on servicing the needs of the bigger fish. I think that compromise is needed if they need to remain profitable.
Perhaps, if they belatedly realise that they failed their faithfuls, they will soon claim that they have a panacea, a wonder drug- OI restriction lifted- tech issues resolved etc.
It is we the traders who have glorified one broker too much and we have to own up.
The world will not end if small fish leave Zerodha nor will the small fish be at any distinct disadvantage elsewhere.
Choose your poison.
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I sold Nifty 15th July 15400 PE and tried to hedge buy Nifty 22nd July 15300 PE as calender spread. But Zerodha blocked hedge strike. I believe I need to wrap up my trading in Zerodha as they are blocking OTM strikes with the reason of OI, Liquidity and etc.
Suggest me some brokers who allows all strike options to buy as hedge. Any review on Angel and Fyers is welcome.
I think this should executeâŚif buy and sell were equal lotsâŚkindly chek if 22 July was blocked due to illiquidityâŚif so, place limit order on 22 July lots to executeâŚcheers
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It should be allowed provided you donât have any other longs on nifty either in pe or ce. Can you confirm once.
Selling was 2 lots and Hedging was 1 lot. Calender ratio spread should be allowed. Yes, 22nd July was blocked due to illiquidity but it should be allowed as Hedge since I did selling first. If limit order does not get executed, what would be the fix?
It was a fresh weekly trade. Nothing was there.
Trade was like below:
2x Nifty 15th July 15400 PE Sell
1x Nifty 22nd July 15300 PE Buy
Guide me where I went wrong!!
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I am evaluating Fyers. I have given feedback in this thread. The two updates which are there from the last post is
- Introduced option chain in Fyers web, much better than what Zerodha provides
- Launched Options Desk similar to Sensibull
So far, I have
- Bought OTM strikes without any issues
- Got brokerage refund for successful completion of 30 days challenge.
- Able to buy and pledge direct mutual funds
- Use their desktop platform, dartstock rebranded as FyersOne with some customization
- IPO application and allotment without any issues. I had tried to apply for Clean IPO via Zerodha, but never received the UPI mandate.
Cons:
- One click Exit of open positions is only avl at market price. If you have to do limit order, it needs multiple clicks.
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Do they provide repeated 30 days challenge or is it one time challenge?