Open Interest on WebNotes

Client-wise position limit exceeded in currency derivatives

Sun, 21 Jun 2026 00:00:00 +0000

The “client-wise position limit exceeded” error in currency derivatives fires when an order would push your gross open position in a currency pair past the per-client limit the exchange sets on a PAN basis. For USD-INR the cap is the higher of USD 10 million or 6 per cent of the total open interest in USD-INR contracts, measured across every broker where you trade, not per account. The limit is a SEBI and exchange risk control on concentration in the currency segment , enforced by NSE and BSE clearing, not a Zerodha house rule.

F&O ban period restrictions

Sun, 21 Jun 2026 00:00:00 +0000

A stock enters the F&O ban period when the market-wide open interest in its derivatives crosses 95% of the market-wide position limit (MWPL) set by the National Stock Exchange and BSE . During the ban, the exchange permits only one kind of trade in that stock: a trade that reduces or maintains your net future-equivalent open interest. Open a fresh position, or add to one, and you breach the rule and pay a daily penalty. This article sets out exactly what is allowed, what is barred, the penalty arithmetic, and how Zerodha enforces the restriction on Kite .

Max pain theory

Sun, 21 Jun 2026 00:00:00 +0000

Max pain theory holds that the price of an underlying tends to gravitate, at options expiry, toward the strike at which the total payout to all option buyers, calls and puts together, is the smallest. That strike is the max-pain strike. Stated from the other side, it is the price at which option writers, mostly dealers and market makers, retain the maximum premium, because the largest number of contracts across both calls and puts expire worthless there. The level is computed from the open interest reported on the National Stock Exchange option chain.

Open interest

Sun, 21 Jun 2026 00:00:00 +0000

Open interest is the total number of futures and options contracts on a particular instrument that remain open at a given moment, meaning neither the buyer nor the seller has squared off the position, and the contract has not yet expired or been settled. It is reported by the National Stock Exchange and the Multi Commodity Exchange for every contract they list, and it is the single most-watched gauge of how much live money sits in a derivative.

Put-call ratio

Sun, 21 Jun 2026 00:00:00 +0000

The put-call ratio, abbreviated PCR, is an options-sentiment gauge that divides put activity by call activity in an underlying, computed from the option chain data published by the National Stock Exchange . A reading above 1 means more put activity than call activity, conventionally read as bearish positioning or heavy hedging; a reading below 1 means call activity dominates, read as bullish positioning. It is one of the most widely watched single numbers in Indian derivatives.

Strike selection on the option chain

Sun, 21 Jun 2026 00:00:00 +0000

Strike selection is the choice of which option strike to trade, made by weighing the strike’s delta and its implied probability of expiring in-the-money, its liquidity as shown by open interest and volume, the risk-reward of the position, and the tradeoff between in-the-money, at-the-money and out-of-the-money moneyness . On Zerodha it is done by reading the Kite option chain, which lists every listed strike with its open interest, volume, implied volatility and, in the Greeks tab, its delta and the other Greeks. The strike a trader picks fixes the cost, the leverage, the probability of profit and the risk profile of the whole position.

Why MIS is blocked for FINNIFTY contracts on Zerodha

Sun, 21 Jun 2026 00:00:00 +0000

MIS, Zerodha’s leveraged intraday product, is blocked for a FINNIFTY contract when that contract’s open interest is below 20,000 quantities, equal to 500 lots. Kite shows “MIS (Intraday) is blocked for this FINNIFTY contract,” and the block is a liquidity rule: an illiquid strike cannot be auto-squared-off safely with intraday leverage, so Zerodha restricts the leveraged product to liquid contracts.

The fix is to switch to NRML , which carries no MIS liquidity block but needs the full overnight margin. This article covers the exact message, the precise 20,000-quantity threshold and how it is derived, why the auto-square-off risk drives the rule, the fact that exits are always allowed, and how the same liquidity logic governs which index-option contracts accept market orders.

Why scrips enter the F&O ban

Sun, 21 Jun 2026 00:00:00 +0000

A stock enters the F&O ban when the combined market-wide open interest in its futures and options crosses 95% of its market-wide position limit (MWPL), the cap on total open interest that the National Stock Exchange and BSE set for each derivative stock under SEBI’s position-limit framework. The stock leaves the ban once that open interest falls back below 80% of the MWPL. This article explains how the MWPL is calculated, why the 95% and 80% thresholds are set where they are, how the daily ban list is built and published, and what changed when the exchanges moved to a delta-based open-interest measure.

How to use the options chain on Kite

Tue, 12 May 2026 00:00:00 +0000

The options chain on Kite provides a unified view of all call and put contracts for a given underlying and expiry, along with real-time pricing, open interest, implied volatility, and the option Greeks. Understanding how to read it is a prerequisite for informed options trading on Zerodha .

For background on how F&O trading works see How to trade options on Kite (first time) and F&O segment on Zerodha .

What the options chain shows

An options chain is a table listing every tradable strike for a given underlying and expiry, with live market data for both the call and put side. Each row is a single strike price; the corresponding CE and PE contracts for that strike appear on opposite sides of the table.