Options Strategy Advisor — Indian F&O Markets (NSE)
Overview
This skill provides comprehensive options strategy analysis tailored to the Indian Futures & Options market on the National Stock Exchange (NSE). It covers strategy selection, live data retrieval, margin estimation, profit/loss simulation, Greeks analysis, and risk management — all adapted for the specific characteristics of Indian F&O trading.
Indian F&O Market Characteristics
Exercise Style
- European-style exercise only. Options on NSE can only be exercised at expiry, not before. This simplifies pricing (Black-Scholes applies directly without early-exercise adjustments) and means time value is always fully captured by the seller until expiry.
Expiry Schedule
| Underlying | Expiry Day | Expiry Type |
|---|---|---|
| NIFTY | Thursday | Weekly + Monthly |
| BANK NIFTY | Wednesday | Weekly + Monthly |
| FINNIFTY | Tuesday | Weekly + Monthly |
| SENSEX (BSE) | Friday | Weekly + Monthly |
| Stock Options | Last Thursday | Monthly only |
- Monthly expiry is the last Thursday of the month (or preceding trading day if Thursday is a holiday).
- Weekly expiries are available only for index options, not individual stocks.
Lot Sizes
Lot sizes are periodically revised by the exchanges. Always verify current lot
sizes using the Groww MCP tool fno_mcx_contracts_search_tool before calculating
margin or position size. Recent reference values:
- NIFTY: 75 (recently changed — confirm via MCP)
- BANK NIFTY: 15 (recently changed — confirm via MCP)
- FINNIFTY: 25
- Stock options: Varies by stock (check contract specifications)
Margin Requirements
SEBI mandates the following margin components for F&O:
- SPAN Margin — Risk-based margin calculated by the exchange clearing corporation.
- Exposure Margin — Additional margin over SPAN for market-wide risk.
- Peak Margin — Intraday margin snapshots; brokers must collect at least the peak margin observed during the day.
Use calculate_fno_margin to get exact margin for any trade before placing it.
Transaction Costs
- STT (Securities Transaction Tax): Levied on the sell side of options at 0.0625% of the intrinsic value on exercise (for ITM options at expiry). For futures, STT is 0.0125% on sell side.
- Brokerage: Varies by broker (Groww charges per-order flat fees).
- Exchange charges, GST, SEBI turnover fee, stamp duty also apply.
F&O Ban Mechanism
When the market-wide position limit (MWPL) for a stock's F&O contracts exceeds 95%, SEBI places the stock under an F&O ban. During the ban:
- No new positions can be initiated.
- Only squaring off (closing) of existing positions is allowed.
- The ban is lifted when MWPL drops below 80%.
Broker MCP Tool Integration
This skill uses broker MCP tools for live market data and execution support. Use whichever broker is connected (Groww or Zerodha Kite). Always prefer live data over assumptions.
Groww MCP Tools (if connected)
| Tool | Purpose |
|---|---|
get_ltp (segment=FNO, query_type=fno) | Live option/futures prices and OI |
get_quotes_and_depth (segment=FNO) | Bid/ask spreads and market depth |
fno_mcx_contracts_search_tool | Search F&O contracts, lot sizes, expiries |
fetch_historical_candle_data (segment=FNO) | Historical option price data |
fetch_curated_fno | F&O gainers, losers, most traded |
get_open_interest_analysis | OI structure, PCR, support/resistance |
get_greeks_for_fno_contract | Live Greeks for specific contracts |
get_greeks_for_fno_symbol | Greeks for all contracts of an underlying |
get_atm_straddle_chart | ATM straddle premium analysis |
get_payoff_chart_steps | Payoff diagram generation instructions |
calculate_fno_margin | Margin requirement calculation |
get_available_margin_details | User's available margin |
resolve_market_time_and_calendar | Market hours and trading calendar |
Zerodha Kite MCP Tools (if connected)
| Tool | Purpose |
|---|---|
get_ltp | Last traded price for F&O instruments |
get_quotes | Real-time quotes with bid/ask depth |
get_ohlc | OHLC data for options/futures contracts |
get_historical_data | Historical candle data for F&O |
search_instruments | Search for F&O contracts by name/expiry |
get_margins | Account margins and available funds |
get_positions | Current F&O positions |
get_orders / get_order_history | Order status and execution details |
place_order / modify_order / cancel_order | Order management |
place_gtt_order / get_gtts | GTT order management |
Tool Equivalence Map
| Action | Groww MCP | Zerodha Kite MCP |
|---|---|---|
| Live price | get_ltp | get_ltp |
| Market depth | get_quotes_and_depth | get_quotes |
| Historical data | fetch_historical_candle_data | get_historical_data |
| Search contracts | fno_mcx_contracts_search_tool | search_instruments |
| Margin check | calculate_fno_margin / get_available_margin_details | get_margins |
| Positions | get_my_trading_positions_today | get_positions |
| Place orders | place_fno_order | place_order |
Supported Strategies
Income Strategies
-
Covered Call — Long underlying futures + Short OTM Call
- Objective: Generate income on existing long position.
- Best when: Mildly bullish, want to earn premium.
- Indian note: Use futures as underlying (no direct stock delivery for covered calls in F&O segment).
-
Cash-Secured Put — Short OTM Put (with margin set aside)
- Objective: Earn premium while waiting to buy at a lower price.
- Best when: Bullish on underlying, willing to take delivery equivalent.
- Indian note: Physical settlement applies for stock options (ITM at expiry).
Protection Strategies
-
Protective Put — Long underlying + Long Put
- Objective: Insure existing long position against downside.
- Best when: Want to cap losses while maintaining upside.
-
Collar — Long underlying + Long Put + Short Call
- Objective: Cap both upside and downside. Zero-cost collar if premiums offset.
- Best when: Want protection without paying net premium.
Directional Strategies
-
Bull Call Spread — Long lower-strike Call + Short higher-strike Call
- Objective: Limited-risk bullish bet.
- Best when: Moderately bullish, want defined risk.
-
Bear Put Spread — Long higher-strike Put + Short lower-strike Put
- Objective: Limited-risk bearish bet.
- Best when: Moderately bearish, want defined risk.
-
Bull Put Spread — Short higher-strike Put + Long lower-strike Put
- Objective: Credit spread, profit if price stays above short strike.
- Best when: Mildly bullish, want to collect premium.
-
Bear Call Spread — Short lower-strike Call + Long higher-strike Call
- Objective: Credit spread, profit if price stays below short strike.
- Best when: Mildly bearish, want to collect premium.
Volatility Strategies
-
Long Straddle — Long ATM Call + Long ATM Put
- Objective: Profit from large move in either direction.
- Best when: Expecting high volatility (e.g., pre-budget, RBI policy, earnings).
- Indian note: Popular before Union Budget day, election results, RBI MPC.
-
Short Straddle — Short ATM Call + Short ATM Put
- Objective: Profit from time decay when expecting range-bound movement.
- Best when: Low implied volatility expected, range-bound market.
- Indian note: Very popular on weekly expiry day for Nifty/Bank Nifty.
-
Long Strangle — Long OTM Call + Long OTM Put
- Objective: Cheaper alternative to straddle for volatility plays.
- Best when: Expecting very large move, want lower cost than straddle.
-
Short Strangle — Short OTM Call + Short OTM Put
- Objective: Wider profit