Zerodha restricts market orders for certain contracts due to liquidity concerns. Illiquid contracts may have bid/ask prices that differ significantly from the last traded or theoretical prices. Placing market orders without considering these bids/asks can lead to unfavourable trade execution and potential losses.
Specific restrictions
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You cannot place market orders for illiquid index options. For FinNifty, MidCPNifty, and Sensex, you can place market orders only for option contracts with an Open Interest (OI) of over 500 lots or 20,000 quantities. You can place market orders for two weekly and two monthly contracts (current and near) for Nifty and Bank Nifty options. However, market orders are blocked for:
- Weekly expiries other than the current and next week
- Monthly expiries other than the current and next month
- Deep ITM (in the money) contracts exceeding 5%
- You cannot place market orders for all stock options.
- You cannot place SL-M orders for all index option derivative contracts, as the exchanges have discontinued them.
- You cannot place market orders for monthly index options in After Market Orders (AMOs).
Alternative solution
You can place limit orders at or above the best bid/ask price to execute trades instantly, similar to a market order.