Why stock option buy with market orders not allowed at Zerodha?

We have had customers placing market orders without checking bids/asks on such contracts and losing money due to trade execution at arbitrary prices. Market orders are hence blocked for illiquid index options and all stock options. Market and SL-M orders are blocked for all FinNifty contracts due to illiquidity.

Why is option order rejected?

If a buy or sell order you have placed is rejected it could be due to one of many reasons like insufficient margin, incorrect use of order type, scrip not available for trading, stock group change etc.

Why are market orders not allowed?

Because of illiquidity of stock option contracts, market orders have been disabled. Only limit orders are allowed. Place a limit buying order higher than the current price or selling order below the current price, this will act as good as market order but will also save from any impact cost due to illiquidity.

Why can’t I buy stock options close to the expiry?

You will not be able to enter into new long positions in stock options in the last two days of expiry (i.e. Wednesday and Thursday) since the contracts can become due for physical settlement. Since stock options can be illiquid, it becomes difficult to exit the contract and increases the risk for the brokerage firm.

Are market orders bad?

The biggest drawback of the market order is that you can’t specify the price of the trade. “You can’t specify the price of the trade. Many times that doesn’t matter, however.” However, if the price moves quickly, you could end up trading at a vastly different price from when you entered the order.

Which Broker allows market order for stock options?

Bracket Order Broker List