You might be unable to sell your options contract due to:
Margin Requirement:
- Selling an options contract requires a minimum margin balance in your account. This margin acts as a security deposit set by the exchange.
- The required margin depends on factors like the type of options contract, strike price, and market volatility.
- If your account balance is below this margin, you won’t be able to sell the contract. To proceed, you’ll need to add funds to your Stock. FNO balance to meet the margin requirement.
Low Liquidity and Market Mismatch:
- Your options contract may not sell if there aren’t enough buyers, especially if the contract has low open interest, is far from the money, or close to expiration.
- If the strike price is significantly different from the current market price (deep in-the-money or out-of-the-money), finding buyers becomes harder, limiting liquidity.