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