Why does NRML & Intraday orders for contracts are blocked due to illiquidity?

Protection from Illiquid Contracts

A lack of liquidity implies that the bid-ask spread for security is quite wide, which can have an immediate and unfavorable impact on your profit and loss (P&L).

Below are the rules for the NRML and MIS orders in the contract

NRML or Carry Forward Orders:

1. Contracts with a strike price within a +/- 10% range of the spot price are permitted for trading.
2. Only those contracts within this range with an open interest greater than 100 as on the previous trading day are eligible for trading.
   Note: If a contract’s open interest rises above 100 during the day, it will become eligible for trading on the following day.

MIS or Intraday Orders:

1. ITM (In the Money) contracts with a strike price within a +/- 7% range of the spot price are permitted for trading.
2. OTM (Out of the Money) contracts with a strike price within a +/- 10% range of the spot price are eligible for trading.