How to Carry Forward Options in Zerodha?
Check All Frequently Asked Questions
Options trading is risky and most of the time the trade expires worthless on expiry. But what if you can roll over your position? It helps you from losses, Right? So, let’s check how to carry forward options in Zerodha?
How to Rollover Option to Next Month Zerodha?
Rollover is generally done in the future contract where both buyers and sellers are obligated to settle the trade at the defined price on expiry. In options trading, the buyer already has a right to exit the trade without settlement if the market condition is not as per his prediction.
So, in simple terms, you cannot roll over or say carry forward your same position to the next expiry. However, you can exit the trade and can take a new position at the same strike price for the next month’s expiry.
Let’s take an example to understand this.
For example, you take a call option position in Reliance at ₹2600 strike price that is going to expire today. Now, the market is in the range and there is not much gain that you can earn from your current position.
But as per your analysis, you are sure of the strong bullish trend in the share price and therefore thought to carry forward the position.
Since the option does not allow you to carry forward, so here you can just exit your long position before the expiry time and buy the same position by paying the required premium value for next month’s expiry.
To close your current position you might suffer a loss as premium decay with time but if your market analysis goes right then you can make a good profit to cover up your losses by the next expiry of the Reliance option contract.
Similarly, for Nifty and Bank Nifty where the option expires every Thursday (weekly expiry), you can follow the same set of rules to carry forward your position.
In order to take a new position you need to follow the steps involved to trade options.
How to do Option Trading in Zerodha?
As mentioned above, you have to exit from the current position and take a new position on that day for the next month or weekly expiry. For this follow the steps below by considering the same example as above.
- Open the Zerodha Kite app and click on Position.
- Tap the Reliance option and click on Sell.
- Enter the details and confirm your order.
- Next search for the Reliance CE option with the same strike price for the next expiry.
- You can also select the call option from the Zerodha option chain.
- Click on Buy.
- Enter the details of price, lot size etc.
- Swipe left to confirm your order.
Similarly if you for a short position you can exit by placing a buy order and then a sell order for the options contract.
Zerodha Options Charges
Let’s talk about rollover charges in Zerodha now. Since no rollover happens in options hence there are no fees. However, to take a new position for the next expiry you need to pay the defined Zerodha brokerage.
Here is the detail of Zerodha option brokerage charges for different segments:
|Zerodha Option Trading Charges|
|Equity Options||₹20 per trade|
|Currency Options||0.03% or ₹20 whichever is lower|
|Commodity Options||0.03% or ₹20 whichever is lower|
Further to get an idea of taxes and other charges, you can use Zerodha brokerage calculator for quick calculation.
There is no provision to carry forward your buy or sell option position, however with the advance trading app and proper analysis of trends you can exit and take a fresh position with the new expiry using the Zerodha Kite app.
The app offers you many more benefits that provide you a smooth trading experience.
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