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Why can’t index option buy positions be converted from MIS to NRML?

Due to broker-level OI (Open Interest) restrictions from SEBI, Zerodha does not allow option buy position conversion from MIS to NRML and displays this error: Position conversion from MIS to NRML is not allowed for [index] option buy positions.

Zerodha also restricts buying OTM (Out of the money) index options beyond a certain strike price due to the same OI restrictions. To learn more, see Why are there restrictions on placing Bank Nifty and Nifty option orders for certain strike prices? All the allowed strikes for index options can be checked on the margin calculator (WEB).

The restriction of converting index option buy positions from intraday (MIS) to overnight (NRML) doesn't apply to short-option positions.

MIS index option positions can be converted to NRML on the expiry day or if a client has an equal quantity of short positions since Zerodha allows buying options contracts as long as they are part of an option strategy.