Problem: Index option buyers plan trades on the underlying index chart (e.g., Nifty 50), not individual strike premium charts. Because premiums distort due to theta decay and IV swings, setting static premium-based GTT levels often triggers prematurely or requires constant manual recalculation.
Proposed Solution: Allow placing option orders where triggers, stop-loss, and target levels are tied directly to the underlying index level, with contract trigger prices estimated via the Black-Scholes model.
Key Requirements: Underlying-Driven Triggers: Set entry, SL, and target using Nifty spot/futures levels (e.g., Entry at 25,200, SL at 25,150, Target at 25,300). Black-Scholes Pricing: System computes estimated option exit prices using current IV, Greeks (Delta), and time to expiry. Execution: Once the underlying index hits the specified level, Kite triggers the market/limit square-off for the chosen option contract. Kite Connect API Support: Allow a trigger_instrument_token (underlying spot) distinct from the order_instrument_token (option strike) for conditional orders and GTT.
Impact: Removes manual guesswork, prevents false exits caused by premium volatility, and makes systematic options execution far more reliable for retail traders and API developers.
