Zerodha market order F&O illiquid options no trades Kite error limit order

Why a market order is rejected on an F&O contract with no trades

From WebNotes, a public knowledge base. Last updated 21 June 2026. Reading time ~10 min.

Key facts

Exact Kite message	The market order was rejected since there are no trades in this instrument. Try placing a LIMIT order
Why it appears	The contract has zero traded volume for the day, so there is no last-traded price to fill against
Regulatory basis	NSE circulars restricting market orders on non-traded equity and F&O contracts
Related block	Market and SL-M orders are blocked outright on stock options for illiquidity
Fix	Place an aggressively priced limit order; it executes like a market order but caps your fill price
Index-option rule	Market orders allowed on FinNifty, MidCpNifty and Sensex options only above 20,000 quantity OI

A market order is rejected on an F&O contract with no trades because the contract has had zero traded volume for the day, leaving no last-traded price for the exchange to fill against. Kite returns the message “The market order was rejected since there are no trades in this instrument. Try placing a LIMIT order,” which restates an NSE rule that market orders are not allowed on non-traded equity and F&O contracts.

The fix is a limit order priced aggressively, which executes like a market order while capping the price at which you can be filled. This article covers the exact message, the no-last-traded-price cause, the separate outright block on stock-option market orders for illiquidity, the index-option open-interest thresholds, the impact-cost danger that the rule exists to prevent, and how to construct a limit order that behaves like a market order without the freak-fill risk.

Conflict-of-interest disclosure. This guide is published by the WebNotes Editorial Team for informational purposes and is written independently. WebNotes operates a Zerodha account-opening referral programme, disclosed on the pages that carry the referral link; this guide does not carry it and earns no referral commission from the procedure described here.

What the message says

You place a market order on an F&O contract, usually a far out-of-the-money option strike or a far-month future, and the order is rejected before it reaches the exchange. The reason reads “The market order was rejected since there are no trades in this instrument. Try placing a LIMIT order.” The order does not appear in the exchange order book, because Zerodha’s pre-trade validation layer stops it, the same layer that handles other order rejections on Kite and never sends them on.

The trigger is precise: the contract has had no trade at all during the current session, so it carries no last-traded price (LTP). A market order is an instruction to fill at the best available price, and the matching engine needs a reference price and a resting counter-order to do that. With zero volume and no LTP, there is nothing to anchor the fill, so the exchange refuses the market order rather than execute it at an arbitrary price.

Why the block exists: no last-traded price and impact cost

The rule sits in NSE circulars for the equity, futures and options segments, which restrict market orders on contracts that have not traded during the day. The reason is impact cost. On an illiquid contract, the offers resting in the order book can sit far above the last price, and a market order sweeps through every one of them until it is filled.

Zerodha illustrates the danger with a worked case. A trader in a hurry sends a market order to buy 5 lots of a thin call option, expecting a maximum loss of Rs 12,500. Only 1 lot is offered at Rs 0.5, and the remaining 4 lots are offered at Rs 5. The market order fills 1 lot at Rs 0.5 and 4 lots at Rs 5, so instead of Rs 12,500 the trade blocks Rs 1,02,500. The trader loses close to Rs 1 lakh purely to the gap between the offers, not to any move in the underlying. The no-trades restriction, and the limit-order workaround, exist to stop exactly this.

Numbers and rules around the rejection

Item	Detail	Source
Exact Kite message	“The market order was rejected since there are no trades in this instrument. Try placing a LIMIT order”	Zerodha support, Kite error messages
Cause	Zero traded volume for the day, no last-traded price	NSE segment circulars
Stock-option block	Market and SL-M orders blocked outright for illiquidity	Zerodha RMS policy
Nifty and Bank Nifty options	Market orders allowed on two weekly and two monthly contracts (current and near)	Zerodha RMS policy
FinNifty, MidCpNifty, Sensex options	Market orders allowed only above 20,000 quantity (500 lots) open interest	Zerodha RMS policy
Worked impact-cost case	Rs 12,500 intended, Rs 1,02,500 filled	Zerodha support example

These thresholds are set by NSE rules and Zerodha’s risk-management policy, not by the order window, so they hold across the F&O segment, not only on a single contract.

The separate stock-option block

The no-trades rejection is volume-based and applies to any non-traded contract. A second, broader restriction applies to stock options regardless of whether they have traded: market and stop-loss-market (SL-M) orders are blocked outright on stock options for illiquidity, with the message “Market orders for stock options are blocked due to illiquidity. Try placing a Limit order.” Stock options as a class carry thin order books and wide spreads, so Zerodha removes the market-order option entirely for them rather than rely on a per-day volume check.

Index options are treated by liquidity tier. Market orders are allowed on the most-traded index contracts only: two weekly and two monthly contracts, current and near, for Nifty 50 and Bank Nifty options. For FinNifty , MidCpNifty and Sensex options, market orders are allowed only when the contract’s open interest exceeds 20,000 quantities, the equivalent of 500 lots. Below that the market order is rejected and a limit order is required, the same liquidity logic that drives the MIS block on FINNIFTY on certain expiry days.

The fix: a limit order that behaves like a market order

The workaround is a limit order priced past the current best quote, so it fills immediately but with a price cap. To buy, set the limit price well above the last-traded price; to sell, set it well below. The matching engine fills your order against every resting offer up to your limit, exactly as a market order would up to the impact cost, but it stops at your limit and never fills beyond it. The limit price you enter is the protection: in the Rs 1,02,500 case above, a limit of Rs 0.6 would have filled the single lot at Rs 0.5 and left the rest unfilled, capping the spend at the intended level rather than letting it run to Rs 5.

Check the market depth before you set the limit. Look at the resting offers (for a buy) or bids (for a sell) and set your limit at or just past the level you are willing to accept across the quantity you want. This converts the speed of a market order into a filled-or-capped limit order, which is the entire point of the NSE restriction and Zerodha’s advice to “place a LIMIT order.”

What this is not

This rejection is distinct from the other ways an F&O order fails, and the right fix differs for each. It is not a price-band rejection , which concerns a limit price outside the day’s circuit limits . It is not the limit-price-protection (LPP) rejection, where a limit price falls outside the dynamic band the exchange keeps around the live price to stop freak trades; that one rejects a limit order, while the no-trades message rejects a market order. It is not an RMS rejection for margin. And it is not a freeze-quantity cap on order size. The no-trades message is specifically about a market order on a contract with zero volume, and the cure is always a sensibly priced limit order.

External references

References

Zerodha support, “The market order was rejected since there are no trades in this instrument. Try placing a LIMIT order” (as of 21 June 2026).
NSE circulars for the equity, futures and options segments restricting market orders on non-traded contracts (referenced on the Zerodha support page).
Zerodha support, market orders for stock options blocked due to illiquidity, and the index-option open-interest thresholds of 20,000 quantities for FinNifty, MidCpNifty and Sensex (as of 21 June 2026).
Zerodha support, impact-cost worked example, Rs 12,500 intended trade filling at Rs 1,02,500 on an illiquid call (as of 21 June 2026).

Frequently asked questions

What does 'no trades in this instrument' mean on Kite?

The F&O contract has had zero traded volume for the day, so there is no last-traded price to anchor a market order. NSE restricts market orders on non-traded contracts, so Kite rejects it and asks you to place a limit order instead.

How do I buy an illiquid contract if the market order is rejected?

Place a limit order with a price well above the last-traded price for a buy, or well below it for a sell. The limit order executes like a market order up to your limit, and the limit acts as a cap that protects you from a freak fill on the illiquid contract.

Why does a limit order work when a market order does not?

A market order has no price ceiling, so on an untraded contract the exchange has no reference price and rejects it. A limit order carries an explicit price you accept, so the exchange can match it against any resting order at or better than that price.

Are market orders blocked on all options?

Market and SL-M orders are blocked outright on stock options for illiquidity. For index options, market orders are allowed on the most liquid contracts only: two weekly and two monthly Nifty and Bank Nifty contracts, and FinNifty, MidCpNifty and Sensex contracts above 20,000 quantity open interest.

Could a market order on an illiquid option lose me money?

Yes. On a thin contract the offers can be stacked far above the last price, so a market order can fill several lots at a price many times higher than you expected. Zerodha cites a case where a Rs 12,500 intended trade filled at Rs 1,02,500 because of the impact cost.

Is this the same as the limit-price-protection rejection?

No. The no-trades rejection is about a market order on a contract with zero volume. The limit-price-protection rejection happens when a limit price falls outside the dynamic LPP band the exchange sets around the live price. Both push you toward a sensibly priced limit order.

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Last reviewed: 21 June 2026
Conflicts of interest: WebNotes is independent. No relationship with any broker, registrar or bank named in this article.