Zerodha please allow us to execute hedged stratergies in Basket Order


I really love your platform. It is very far ahead of the competition.
But the otm option buying is causing a lot of issues. I can’t go with Orbis because I don’t have 1 crore net worth and don’t want to declare it so.

I mainly sell strangles on banknifty. My capital is around 1.7 lakh. I’m able to sell 1 Lot each side without any issues but with other brokers I could easily sell two lots each side if I bought 10-15 rs hedge each side.

In zerodha I don’t have enough margin to first short 2 lots and then buy hedges. I can only short 1 Lot and even if I buy hedges each side, I still wouldn’t be able to short another lot. For me, the only solution is to buy 2 lots each side and then short 2 lots each side. Final margin occupied would be 1-1.2 lakh.

So please allow us to execute basket orders fully. If I add two buy options first and then add two shorts and click execute then please let the buy legs be executed first and then the shorts shouldn’t have any margin problem.
I’m not a machine. I won’t cancel my shorts within milliseconds as soon as you allow the buy order in the basket.

Moreover those who are able to buy after shorting, they can also exit their NRML shorts and just hold NRML buys. Nothing is stopping them either.
In the basket order at least, you know the intention of the user. He just wants his stratergy executed at the optimal margin.

So please find a solution to this issue. I regularly short options. Give me 2 lots buy each side as quota or allow my basket to be executed.

Also i think that its really incredible that the clients can directly talk to the CEO through this forum.

@nithin if you could respond :neutral_face:

Hey, @emrys11 there are certain restrictions with our underlying risk management system that wouldn’t allow us to make this exception. But that said, we are building something that should cover this. But it will take some time.

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You can first execute sell side and then buy equal quantity otm options as a hedge… even if its outside the allowed strike range.

Zerodha allows buying OTM options if its used as hedging strategy, but you have to execute the sell side leg first, that means you must have the required margin.

We have made a change, now you are allowed to convert your positions from MIS to NRML as long as the position is hedged (aka quantity of long positions is equal to the quantity of short positions). Hence, you can execute your hedged strategy first in MIS (buying first (as long as the strike is within the MIS allowed range) to utilize lower margins) and then later convert it to NRML.

For reference, check this support article - Why can't I convert my index option buy position from MIS to NRML?


Good step.
But while converting, the buy position will be NRML and then we will convert the short position to NRML as well. Or may be vice versa. Basically all positions can’t be converted at once obviously so there will be a few seconds where either long leg will be NRML and short will be MIS or vice versa. Will it cause margin issues?

Example -
Account has 60k rupees only
MIS buy 1000 point away ce and pe in BN
MIS sell 700 point away ce and pe in BN

All is fine.

Now I convert the buy legs to NRML. Will it throw an error or show negative margin? Because i have two options short in MIS but longs are NRML

Or vice versa
All are MIS. I try converting one short leg to NRML. Will it allow?
A few weeks back I remember that if ce was mis and pe was NRML then both legs needed 1.6 lakh separately.

So please clarify. Thanks

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How long it will take nidal