Why am I not able to trade far strikes of stock options?

The exchange limits trading in strike price based on a predefined range for each stock and only a limited number of strikes are allowed to trade. These limits are relaxed if there is movement in the stock underlying and more strikes are allowed to trade.

1. The step value applicable to each stock shall be determined based on the volatility of the underlying stock.
2. The step value shall be reviewed and if necessary revised on a quarterly basis.
3. The number of calls and put option strikes provided for each underlying shall be a minimum of 5-1-5 subject to a maximum of 10-1-10 strikes. (In the money-At the money-Out of the money)

For example, assuming Maruti is trading at 7300 in the cash market and it has a step value of 100. At the introduction of far month contracts, you will be allowed to trade 6300-8300 strikes. However, as the stock moves, new strikes will be allowed to trade. If Maruti moves to 8000, you will be allowed to trade 6300- 9000 strikes.

If you place an order outside this range, your order will be rejected with the message "16387 : Security is not allowed to trade in this market"

Refer to these exchange circulars( 1 & 2 ) for more information.