Articles in “Derivatives” category
65 articles.
2026 (65)
- Change in open interest
Change in open interest shows positions added or cut. Read the four OI-price scenarios, OI on the Kite option chain, and OI spurts on Zerodha.
- Client-wise position limit exceeded in currency derivatives
The client-wise position limit error in currency F&O fires when your gross open position in a pair crosses the per-client cap, USD 10 million or 6 per cent of …
- Delta (options)
Delta is the rate of change of an option's premium per Re 1 move in the underlying, ranging 0 to 1 for calls and 0 to -1 for puts, and it doubles as the …
- Do Not Exercise (DNE) option
Do Not Exercise let brokers stop exercising close-to-money option strikes. NSE discontinued DNE for CTM strikes from 14 October 2021 after STT was rationalised …
- F&O ban period restrictions
During an F&O ban only delta-reducing trades are allowed. Fresh or increasing positions attract a daily penalty of 1% of the breach, minimum Rs 5,000, and …
- FinNifty futures on Zerodha
Nifty Financial Services (FinNifty) futures on Zerodha: index composition, lot size, Tuesday expiry, cash settlement, and the November 2024 discontinuation of …
- Gamma (options)
Gamma is the second-order option Greek that measures how fast delta changes when the underlying moves, peaking at-the-money and near expiry, and it is the risk …
- How the F&O expiry calendar works
How India's F&O expiry calendar works after the 2025 standardisation: NSE contracts expire Tuesday, BSE Thursday, with one weekly index per exchange and holiday …
- Implied volatility
Implied volatility is the market's expected volatility backed out of option premium. Learn IV vs historical volatility, IV rank, IV crush, and the vega link.
- India VIX
India VIX is NSE's volatility index from the Nifty option order book: a 30-day annualised expected-volatility figure. How to read it and why retail cannot trade …
- Max pain theory
Max pain is the strike that minimises total payout to option buyers at expiry. Learn how it is computed from OI, the pin-risk idea, and its empirical limits.
- Midcap Nifty futures on Zerodha
Nifty Midcap Select (Midcap Nifty) futures on Zerodha: the 25-stock midcap index, lot size, Tuesday expiry, cash settlement, and the November 2024 …
- Moneyness: in-the-money, at-the-money, out-of-the-money
Moneyness classifies an option as in-the-money, at-the-money or out-of-the-money by where the underlying sits relative to the strike, which sets the split of …
- Nifty 50 futures contract specifications
Nifty 50 futures on NSE as traded through Zerodha: lot size, tick size, three serial monthly contracts, Tuesday expiry, cash settlement, and the margin to hold …
- Nifty Midcap (Midcap Select) trading restrictions on Kite
Nifty Midcap Select trading on Kite carries MIS leverage limits, no extra option-buying leverage, and the November 2024 discontinuation of its weekly options, …
- Nifty Next 50 futures on Zerodha
Nifty Next 50 futures on Zerodha: the index of companies ranked 51 to 100, lot size, Tuesday expiry, cash settlement, and the liquidity caveats that distinguish …
- Nifty weekly expiry on Zerodha
Nifty 50 weekly options are NSE's surviving weekly benchmark, expiring Tuesday since 1 September 2025, the most liquid index option in India, listed on Zerodha …
- Open interest
Open interest is the count of outstanding F&O contracts. Learn OI versus volume, the price-OI build-up matrix, and where Kite shows open interest.
- Option premium
Option premium is the price the buyer pays and the seller receives, made of intrinsic value plus time value. Covers Kite premium credit and debit, the Greeks, …
- Physical delivery risks in stock F&O
Why a small option premium can hide a large delivery obligation, how the short-delivery buy-in auction penalty works, the cost of taking or giving delivery, and …
- Physical delivery timing on Zerodha
When the delivery margin ramps in expiry week, when stock F&O obligations are computed, when shares and funds actually move at T+ days after expiry, and how …
- Put-call ratio
The put-call ratio compares put activity with call activity. Learn OI-based and volume-based PCR, contrarian interpretation, typical ranges, and limits.
- Risks of F&O trading on Zerodha
The real risks of futures and options on Zerodha: leverage, unlimited loss on short options, gap risk, margin calls, physical settlement, and the SEBI evidence …
- Sensex weekly expiry on Zerodha
Sensex weekly options are BSE's surviving weekly index benchmark, expiring Thursday since 1 September 2025, with a lot of 20, listed on Zerodha Kite under BFO.
- Stock futures lot size on NSE
How NSE sets single-stock futures lot sizes to a roughly Rs 15 to 20 lakh contract value, when lot sizes are revised, freeze quantity, and where to check the …
- Stock-option restrictions near expiry
Near expiry, Zerodha applies a physical-delivery margin ramp on ITM stock options from expiry minus four days, blocks fresh deep-ITM and illiquid stock options, …
- Strike selection on the option chain
Strike selection on the Zerodha option chain means choosing a strike by delta, open-interest and volume liquidity, risk-reward, and the in-the-money, …
- STT on options exercise
Why securities transaction tax on an exercised in-the-money option is levied on its intrinsic settlement value, not the premium, how the post-2019 narrowing …
- The phaseout of Bank Nifty weekly options
Bank Nifty weekly options were discontinued from 20 November 2024 under the SEBI one-weekly-per-exchange rule. Monthly options and futures remain, expiring last …
- Theta decay
Theta is the option Greek that measures how much premium an option loses per calendar day from time passing alone, accelerating near expiry, which is why option …
- Vega (options)
Vega is the option Greek that measures how much premium changes for a one-point move in implied volatility, largest for at-the-money and longer-dated options, …
- Weekly versus monthly expiry
Weekly vs monthly expiry on Zerodha: only Nifty 50 and Sensex carry weekly options, stock options are monthly only, and theta decay and liquidity differ …
- What happens to unsquared options at expiry
Unsquared options at expiry: ITM index options cash-settle, OTM options lapse, ITM stock options go to physical delivery, and exercise triggers STT on intrinsic …
- Why scrips enter the F&O ban
A stock enters the F&O ban when market-wide open interest crosses 95% of its MWPL, and leaves when it falls below 80%. The MWPL is the lower of 15% of free …
- STT hike on F&O October 2024
Effective October 2024, SEBI increased Securities Transaction Tax (STT) on F&O contracts. Explains the new rates, the rationale, and the impact on retail F&O …
- STT hike on F&O (October 2024)
Effective 1 October 2024, the Securities Transaction Tax on options selling was raised from 0.0625 per cent to 0.1 per cent on premium and on futures selling …
- SPAN margin (Standard Portfolio Analysis of Risk)
SPAN margin is the worst-case initial margin on F&O positions, set by the NSE, BSE, and MCX clearing corporations using SEBI-approved risk-array scenarios.
- Futures and options taxation in India
Encyclopedic reference on the taxation of futures and options (F&O) in India: classification as non-speculative business income under Section 43(5)(d), turnover …
- How to avoid physical settlement (manual close-out)
Step-by-step guide to closing out in-the-money stock options and stock futures before expiry to avoid physical settlement obligations, delivery margin blocks, …
- How to deploy a Streak strategy live
Step-by-step guide to moving a backtested Streak strategy from paper trading to live deployment on Zerodha Kite, including alerts, monitoring, and risk …
- How to roll over an F&O position on Zerodha
Step-by-step guide to rolling over expiring futures and options positions to the next contract month on Zerodha Kite, including timing, costs, and margin …
- How to trade futures on Kite (first time)
Step-by-step guide for first-time futures traders on Zerodha Kite: adding a futures contract, reading the order form, placing the order, and managing the …
- F&O segment on Zerodha
Futures and options trading on Zerodha: product codes, margin types, SEBI framework, brokerage, expiry mechanics, and tax treatment.
- Lot size revision F&O 2024
SEBI revised F&O lot sizes upward in 2024 to raise the minimum contract size and discourage small-ticket speculative trades. Explains the new sizes for major …
- SEBI F&O entry barrier rules 2024
SEBI's 2024 F&O entry barrier rules introduce income, experience, and suitability requirements for retail derivatives participation. Explains the framework, the …
- SEBI study: 90% of retail F&O traders lose money
SEBI's 2022 and 2024 studies found that approximately 90% of retail F&O traders incur losses. Explains the methodology, the headline findings, and the policy …
- SEBI True-to-Label charges October 2024
SEBI's True-to-Label charges framework (effective October 2024) requires exchanges and brokers to disclose each charge component transparently, eliminating …
- SEBI F&O entry barrier rules (October 2024 framework)
On 1 October 2024 SEBI announced a six-measure framework tightening retail access to index futures and options. The framework raised minimum contract size, …
- Weekly expiry contraction (November 2024)
From 20 November 2024 SEBI restricted weekly options to one expiry per exchange. NSE retained Nifty 50 weeklies while Bank Nifty, Nifty Financial Services, …
- Exposure margin (additional margin on Indian derivatives)
Exposure margin is the second-layer initial margin levied by Indian clearing corporations on top of SPAN margin, computed as a fixed percentage of contract …
- Extreme Loss Margin (ELM)
Extreme Loss Margin is an additional layer of initial margin on Indian derivatives and cash equity positions, calibrated by SEBI to cover statistically extreme …
- PPFAS stance on derivatives, futures and options
Encyclopedic reference on the deliberate stance at PPFAS Mutual Fund against the use of directional futures and options in equity-oriented schemes. Covers the …
- How to backtest a strategy on Streak
Step-by-step guide to defining, running, and interpreting a backtest on Streak, the algo-strategy platform integrated with Zerodha Kite.
- How to build an options strategy on Sensibull
Step-by-step guide to constructing, analysing, and saving multi-leg options strategies using Sensibull's strategy builder, payoff charts, and Greeks dashboard.
- How to calculate margin using the Zerodha SPAN calculator
Step-by-step guide to using Zerodha's SPAN margin calculator to estimate futures and options margin before placing any trade.
- How to exit a multi-leg F&O position on Zerodha
Step-by-step guide to cleanly closing all legs of a multi-leg options or futures position on Zerodha Kite, including basket exit, individual leg exit, and …
- How to handle freeze quantity on F&O
Explains what the NSE and BSE F&O freeze quantity limit is, how to find the current limit for each contract, and how to place orders above the freeze quantity …
- How to interpret the margin shortfall SMS on Zerodha
Explains every field in the Zerodha margin shortfall SMS and email notification, what immediate action to take, and how to prevent recurring shortfalls.
- How to physically settle an in-the-money option
Explains the physical settlement process for in-the-money stock options on NSE, what obligations arise, how Zerodha handles delivery margin, and what to do if …
- How to read option Greeks on Kite
Step-by-step guide to finding, reading, and applying Delta, Gamma, Theta, and Vega displayed in the Zerodha Kite options chain and order flow interface.
- How to trade options on Kite (first time)
Step-by-step guide for first-time options traders on Zerodha Kite: finding a contract, reading the order form, buying and selling options, and managing the …
- How to understand peak margin penalty
Explains the SEBI peak margin reporting framework, how the four intraday snapshots work, what triggers a shortfall penalty, and how to avoid it on Zerodha.
- How to use options payoff charts on Sensibull
Step-by-step guide to reading Sensibull's payoff chart, interpreting breakeven points and maximum profit/loss zones, and using the chart to compare strategy …
- How to use the basket order for multi-leg options on Kite
Step-by-step guide to building and submitting a basket order on Zerodha Kite to execute all legs of a multi-leg options strategy simultaneously.
- How to use the options chain on Kite
Step-by-step guide to reading and using the Zerodha Kite options chain to identify strikes, analyse open interest, and place options orders efficiently.