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Bulletins

Updates to help you make informed trading decisions.

Revised Options Strike Criteria

There is an important update regarding options trading on our platforms. In this article, we will cover the key changes that we have implemented to provide better risk control in options trading. These changes are being implemented due to concerns about illiquidity, as they can cause losses to the clients.

Change 1: Strike Range:

We have disabled options strikes that are far away from the underlying price for all segments as explained below:

Underlying Allowed strike range from underlying price
Equity Index Options
15%
Equity Stock Options
20% (with below exceptions)
Currency Options
8%
Commodity Options
15% (with below exceptions)

Exception for Equity stock options: The below stocks fall under the exception criteria of of 20% strike range

Symbol Proposed
ABCAPITAL
30.00%
ABFRL
25.00%
ACC
25.00%
ADANIENT
30.00%
ADANIPORTS
25.00%
AUBANK
25.00%
BANDHANBNK
40.00%
BANKBARODA
25.00%
BEL
30.00%
BERGEPAINT
30.00%
BHEL
30.00%
BIOCON
30.00%
BPCL
25.00%
BSOFT
40.00%
CANFINHOME
25.00%
CIPLA
25.00%
COALINDIA
30.00%
COFORGE
30.00%
CROMPTON
25.00%
CUB
25.00%
DALBHARAT
25.00%
DIXON
30.00%
DLF
25.00%
EICHERMOT
25.00%
EXIDEIND
40.00%
GAIL
25.00%
GMRINFRA
30.00%
GODREJPROP
25.00%
GRANULES
25.00%
HAL
25.00%
HCLTECH
25.00%
HEROMOTOCO
25.00%
HINDALCO
25.00%
HINDCOPPER
40.00%
HINDPETRO
25.00%
ICICIPRULI
25.00%
IDEA
60.00%
IEX
30.00%
IGL
25.00%
INDHOTEL
25.00%
INDIACEM
25.00%
INDUSTOWER
40.00%
INFY
25.00%
IOC
25.00%
IRCTC
30.00%
JINDALSTEL
25.00%
JKCEMENT
25.00%
JUBLFOOD
25.00%
KOTAKBANK
50.00%
L&TFH
25.00%
LAURUSLABS
25.00%
LTIM
25.00%
LTTS
25.00%
M&MFIN
25.00%
MANAPPURAM
25.00%
MCX
25.00%
METROPOLIS
25.00%
MOTHERSON
25.00%
MPHASIS
30.00%
MUTHOOTFIN
25.00%
NATIONALUM
40.00%
NAUKRI
25.00%
NMDC
30.00%
OBEROIRLTY
25.00%
OFSS
40.00%
PEL
30.00%
PERSISTENT
40.00%
PFC
30.00%
PIIND
25.00%
PNB
25.00%
RAMCOCEM
25.00%
RBLBANK
25.00%
RECLTD
30.00%
SAIL
30.00%
SHREECEM
25.00%
SIEMENS
25.00%
SYNGENE
25.00%
TATACHEM
30.00%
TATACOMM
30.00%
TATAPOWER
30.00%
TATASTEEL
25.00%
TECHM
25.00%
TVSMOTOR
25.00%
UPL
30.00%
VEDL
40.00%
VOLTAS
30.00%
WIPRO
30.00%
ZEEL
60.00%
ZYDUSLIFE
25.00%

Exception for Commodity Options: The below scrips fall under the exception criteria of 15% strike range

Scrip Strike Range
Crude Oil
30%
Natural Gas
40%

Let’s understand with the help of an example:

Example: Index (With the strike range of 15%) Assuming the current market price of Nifty is 20000. With a 15% strike range, you can trade in option strikes within the range of 17000 to 23000. Note: You can square off your existing open positions regardless of the allowed strike range criteria.

Change 2: Strikes with Zero Open Interest:

Strikes with Zero interest: What’s the change?

We've also made a change regarding strikes with zero open interest. These strikes will be disabled for placing orders on non-expiry days but will remain available for trading on expiry days.

Let’s understand this also with the help of an example:

Example: If the Open Interest (OI) of 19500 Nifty CE 23rd Oct 2023 as of 21st Sept 2023 is 0, the strike will not be allowed for the next trading day, i.e., 22nd Sept 2023.

Rationale behind the above Changes:

  • Enhanced Liquidity and Reduced slippages: By focusing on strikes closer to the current market price of the underlying with open interest, we improve liquidity and reduce the risk of slippage and fat-fingering by disabling trading in less liquid strikes.
  • Narrower Bid-Ask Spreads: Increased liquidity leads to narrower bid-ask spreads, reducing transaction costs for traders.

Conclusion: Elevating Your Trading Experience

These changes are part of our ongoing commitment to provide a safer, more efficient, and user-focused trading environment. By limiting strike ranges, our goal is to offer you a risk-optimized trading experience.

As always, we value your feedback and are here to address your questions. Please reach out to our support team for further clarification on these updates. We're dedicated to supporting your trading journey and helping you achieve your goals.

Happy and successful trading!

Disclaimer: Futures and Options (derivatives): Derivatives are a sophisticated investment device. The investor is requested to take into consideration all the risk factors before actually trading in derivative contracts.

Risk Disclosure on Derivatives

As per a SEBI study dated 25 Jan 2023

9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses. On an average, loss makers registered net trading loss close to ₹ 50,000. Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs. Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost.

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