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:

• Contracts with a strike price within a +/- 10% range of the spot price are permitted for trading.

• Only those contracts within this range with a minimum day volume of 100000 (1Lakh) or open interest greater than 100 during the day are eligible for trading.

MIS or Intraday Orders:

• ITM (In the Money) contracts with a strike price within a +/- 7% range of the spot price are permitted for trading.

• OTM (Out of the Money) contracts with a strike price within a +/- 10% range of the spot price are eligible for trading.

Note: For both NRML and MIS orders, clients with existing positions outside the specified boundaries are permitted to square off these positions