I had a credit spread of
26000 28 Nov Put SHORT and
25500 28 Nov Put LONG.
This trade had a max loss of around 4800 rs, but my broker squared this position off and because these options were deep in the money, and didn’t got fair prices to square it off, I had to bear additional 7000 rs loss.
I had some 1,20,000 rs as collateral and around 20,000 rs as cash. But still the broker squared it off. Even though these options are cash settled, why can’t just brokers run such positions?
I just want to know why brokers are not aware of the limited risk and limited profit strategies? Why can’t they just ask clients first and then square off such positions? I am sure I’m not the first to experience this but still…
Interesting… why would they square off ? @Jason_Castelino any idea ?
Never understood the basis for closing positions.
Curious, which broker? 
If the underlying is a stock, then it’s expected because ITM/CTM longs (even though it’s part of a spread) now require much higher margins starting E-4 days:
This is in addition to the margin required for the short leg.
It doesn’t make much sense but those are the rules made up by the peeps at SEBI 
. The justification was that the client could potentially square off one of the spread legs and increase risk/margin. A more friendly and elegant solution would’ve been to just warn the client if they did that and to check if they had the margin to take on a naked position.
I’m sure this is exactly what happens at restaurants where the chef doesn’t taste their food and has an inflated opinion of their skills 
