Option Plus is a feature of ICICI Direct which increases your purchasing power of derivative instruments up to 10 times. For example, if you’ve 1500 Rs in your account, you can purchase an option whose premium is up to 15k. If you’re using any other broker, you can buy an instrument whose premium is less than or equal to the amount in your trading account. This is a big difference between ICICI Direct and other online stock brokers.
For a better understanding of this feature, let’s find out how many lots of Finnifty you can buy if you have 7173 Rs in your trading account and if you place the Option Plus order!
As you can see from the above image, the Finnifty put option with the strike price of 19700 is available for purchase at 42 Rs. A single Finnifty lot comprises 40 shares. Thus, the premium to be paid by me is 1680 Rs (42 x 40) in case I place the “Normal” order.
If I enter the SL trigger price as 38, the required margin for placing this order is 240 Rs (6 x 40). I will have to pay just 240 Rupees instead of 1680. With just 7163 Rupees in my account, I can buy 920 shares or 23 lots of Finnifty if I place the stop loss/option plus order. If I choose the type “Normal”, the required margin will be 38640 INR.
How to use this feature? You can access OptionPlus by clicking on the Buy/Sell buttons available on the watchlist or Flash Trade interfaces of the broker. In the order placement form, you must choose the order type “Stop Loss”.
Stop Loss is the most important aspect of Option Plus. This is because the required margin will be displayed only after you enter the SL trigger price. The number of lots you can buy or sell also depends on this price. The quantity will increase or decrease each time you change the SL trigger value.
How to see all Option Plus orders on ICICI Direct? The broker’s trade book interface allows users to filter data by order type. You will see these types on this interface – Future, FuturePlus, FuturePlus Stop Loss, Option, OptionPlus. Click on “OptionPlus”.
Is there any fees you’ve to pay to use this cool feature of ICICI Direct? No, the brokerage charged by the company will be the same across each segment. It depends on the plan you’ve chosen. For example, if you’ve bought the 4999 Rs prime subscription, you will be paying a brokerage of Rs per lot to ICICI. Likewise, users of the NEO plan, which costs Rs 299 per year, will pay a brokerage of 20 Rupees no matter that the lot quantity is.
Option Plus is an intraday product i.e. This type of order will be squared off on the same day.
Pros
Option Plus is a big boon to successful traders as it offers an unbelievable margin. No other broker I’m aware of (excluding Sharekhan Espresso) offers such a feature to their clients. If you’re using Espresso, you can place a MIS+ bracket order to avail margin benefit.
This feature of ICICI Direct makes it mandatory for a user to set a SL. Thereby reducing the loss.
Cons
You should be careful while using Option Plus. Why is this so? Suppose you have Rs 10000 in your trading account. You buy 24 lots of Nifty whose premium is Rs 44 and set the stop loss trigger price as 40. If premium falls by 4 points, you will lose the entire capital of 10k.
