Update for Option Traders: Introducing Alerts on Breaking Hedge while Trading on Options on Dhan

Hi Everyone

We have rolled out an important update in the Risk Management System & Policies at Dhan that we have deployed this weekend. The update is regarding the options strategies where hedged positions are involved - and option traders are availing hedge benefit on Dhan for their positions.

Traders often make options strategies with a hedge to reduce both risk and upfront margin requirement. Examples of popular strategies are Iron Condor, Iron Butterfly, Spread etc… Now one thing to note here is that upfront margin requirement is reduced in these strategies as the hedge order leg is executed first and this ensures Option Traders get the hedge benefit.

For example, let’s take Bull Call Spread as a trading strategy

Scrips Buy/Sell Premium Individual Margin Requirement
NIFTY 10 NOV 18100 CALL Buy ₹130.00 ₹6,500
NIFTY 10 NOV 18300 CALL Sell ₹50.00 ₹94,271

Overall Margin Requirement if Buy leg is executed first ₹24,850

{To view margin requirement of your options strategy, go to basket order on dhan}

Hence, we see the upfront margin requirement is reduced if the hedge leg is executed first (here in this case, the Buy order). Now one can create this strategy with only ₹24,850 in a trading account. But if someone wants to just place a sell order (without hedge/buy order), the margin requirement is ₹94,271.

Now, after the successful execution of the strategy, one wants to exit the hedge position (Buy position). The hedged position/parent position (Sell Position) will now be unhedged, so you need to maintain a sufficient margin of ₹94,271. If not available, there will be a margin shortfall for your positions.

Introducing Hedge Break Alerts: Now to ensure that you are aware of such scenarios when trading in options and avoid margin shortfall - we have introduced an update, that whenever one exits the hedge position and sufficient margin is not going to be available in Dhan trading account, our Risk Management systems will alert the user with the following message:

“This trade is for a hedged position, exit the parent leg first or add margin of INR XXX to exit this position individually.”

Of course INR XXX is the exact value of the margin required, that is shown to our users in real-time.

We understand that for you as a trader many times exiting the position is important without any margin shortfall or need to add additional capital - hence it is now advised to you that on Dhan you should exit the parent leg / hedged position (sell position) first. In such a scenario, you would be able to exit the position as usual - and then exit the other leg as well.

We understand that there are many Option Traders on Dhan, and we have introduced these alerts to ensure that users avoid any type of margin shortfall, or need to add capital or otherwise and also at the same time introduce better risk management practices for clients.

That’s all from us. We want to ensure you continue to trade as a Super Trader on Dhan.

Thank you,
-Kuldeep Mathur



Thanks for the update. Just wanted few things to re-clarify myself with respect to this.

I trade normally through webhooks using baskets via tradingview alerts.

I normally trade on futures of BNF and during my first trade i create an hedge leg for both the side. I usually trigger 10OTM Strike CE and PE. So i can trade all day long with futures and at day end i square of the hedge options

For the first order of the day. Tradingview fires 2 alerts

  1. alert contains 10 OTM strike CE and PE BUY
  2. alert contains futures leg which is directional.

99.99% of time bothe alerts are fired at same time. But the order of alert is not identical. Meaning sometime future leg gets fired first and option alert gets fired.

With just a split second delay will the margin shortfall gets impacted and the alerts for margin requirement gets trigerred?


Very smart move !
This will be really useful for traders!!!

My question is that, if I get the notification for adding margin or reducing position, and if I am not in front of screen for that moment and I dont see that message, what will happen?

  1. Couldnt add or reduce my position for few minutes or few hours.
  2. Completely ignore and only square off my position at day end.
  3. Completely ignore and carry the trade overnight.

I know your RMS will trigger some action, but I want to be crystal clear as to how this will work.


+1 @Saurabh
Yes would love to know more

The alert is shown when you try to exit an exist open position, not shown otherwise.


Kindly ealborate on @Saurabh queries. I have the same queries as well.