Why am I not able to place market orders for some index and all stock option contracts at Zerodha?
A market order is an instruction to buy the specified quantity of a scrip irrespective of the price it is available at. In the case of illiquid contracts, the bid/ask price could be at a price far from the last traded price or the theoretical price of the contracts.
We have had customers placing market orders without checking bids/asks on such contracts and losing money due to trade execution at arbitrary prices. Market orders are hence blocked for illiquid index options and all stock options.
Market and SL-M orders are blocked for all MidcapNifty contracts due to illiquidity.
For FinNifty, Market orders are only allowed for the current weekly expiry for At-The-Money (ATM) option contracts, i.e up to 1% ITM/OTM on Friday, Monday and Tuesday.
You will be able to place market orders for Nifty and Bank Nifty options with adequate liquidity for the below expiries:
- Current and next week.
- Current month.
Market orders are blocked for:
- All weekly expiries other than the current and next week.
- All monthly expiries other than the current month.
- Deep ITM contracts (which are more than 5% in the money)
Market order AMOs are blocked for all monthly index options. However, you can place limit orders for any of these contracts at or greater than the best bid/ask price to instantly execute your trade like a market order.