Illiquid contracts such as long-dated, deep In-the-Money (ITM) or Out-of-the-Money (OTM) options often carry risks:

• Wide bid/ask spreads
• Very low trading volumes
• Minimal or no open interest

These risks can lead to artificial profits/losses, accidental large trades (fat-finger errors), or being stuck without a counterparty.

To protect investors, regulators and Navia’s Risk Management Policy place restrictions on such trades.

Navia’s Risk Management Policy

• Illiquid options and futures are blocked to safeguard clients.
• Trading such contracts requires higher margins; failing to meet these margins may attract penalties.

Trading Restrictions on Navia & Rocket Plus Platforms

1. Based on Expiry

2. Based on Open Interest (OI)

• Options with zero OI are blocked for trading.
• They may become available once OI is generated.
• If a strike is blocked due to zero OI, you must wait until OI builds before placing an order.

3. Based on Strike Price

Orders are restricted if placed too far away from intrinsic value.

4. Based on Volume: Contracts with zero trading volume are blocked.

5. Current Month Stock Options: One day before expiry, no fresh positions are allowed in current-month stock options.

These measures are designed to protect traders from high-risk positions, ensure compliance, and reduce chances of errors.