Orders & Types Of Orders

Indians are increasingly interested in investing in the stock markets due to the rapid growth of technology, financial literacy, and the internet. 

Before we get into selling and buying stocks, it is important to be familiar with the various types of orders. This will allow you to choose the best order based on your investment objectives.

What's an Order?

An order is a directive from an investor to a broker for him to purchase or sell securities on a trading platform.

Market Order

A Market order allows you to purchase or sell security at the current market price. This type of order executes on the basis the next best price.

Limit Order

A Limit order allows you to set the price at what you would like to purchase or sell security. This is known as the limit price.

Limit order

• - Orders are executed at the limit price, or at a lower price for Buy Limit orders
• - Orders are executed at the limit price, or at a higher price for Sell Limit orders.

Let's now take a look at some Special Order Types.

Stop loss Order

You can limit your losses with a Stop Loss Order. This allows you to exit a trade if a trigger price (the price at which your buy/sell orders become active for execution) has been reached.

Stop Loss Market Order

This is where the Stop loss order becomes a Market order once the trigger price has been reached.

Limit order

This is where the Stop loss order becomes a Limit order once the trigger price has been reached.

Trailing Stop loss order

A Trailing Stop Loss is an order that allows you to set a maximum loss or percentage you can sustain on a trade. The trigger price will rise or fall with the security price in your favor at the specified percentage or value. The trigger price remains in place if the security price falls or rises against you.

Robo Order

Robo orders are multi-leg intraday trading orders that allow you to place two additional orders in addition to your initial order. This type of order can be used to maximize profits at target prices and to minimize losses at trigger prices. Robo orders are available for both buy- and sell orders.

Case 1: If the first order was a Buy, then both Stop Loss and Target orders will be sold.

Case 2: If the first order was a Sell order then the second two orders will be Buy orders.

Investors can save time and book profits by placing a Robo Order.

You might want to purchase shares of Company XYZ for Rs.1,000, and book a profit at Rs.1,050. You are concerned that the price could drop dramatically if it drops below Rs.990. To counter this, place a Robo Order with:

• - A Buy Order at an Initial Price Limit of Rs 1000
• - A sell order with a target price of Rs.1050
• - A Stop Loss Sell Order with a trigger price of Rs 990

The Limit order must be filled before any of the following orders can be triggered or executed. Any remaining orders will be automatically cancelled.

If the Limit order of Rs 1,000 is executed and market movements favor the investor and hit the target price Rs 1,050, then the Target order will be triggered and executed. The Stop loss order will automatically be cancelled.

Robo orders also include a unique feature that allows the client to trail his losses in order to minimize his losses and maximize his returns. Let's say that the client has placed a trailing stop loss order of Rs1 and the stock price of XYZ rises by Rs 1. The stop loss will also go up by Rs1. The stop loss will not change if the stock price falls.

Delivery (also known as Cash & Carry, or CNC)

Delivery orders are when you order, receive and keep the securities in your account. You can keep the securities in your account for as long or as you wish, and you can also sell them at any time.

Margin

Margin allows you to use leverage to place trades and buy stocks for a fraction the trade value.

Margin Product allows for you to place an order with a minimum margin. 

Securities can be bought in delivery with Margin order

If your Ledger Balance stands at Rs 25,000, then you can invest up to Rs 1,25,000 in securities using Margin Order with funding of Rs 1,00,000.

Intraday

Intraday orders are the simultaneous buying and selling securities the day before the market closes.

If you don't close an intraday position, they will be automatically closed before the market closes as per the schedule.

Order IOC Cancel or Immediate (IOC).

You can place an Immediate-Or-Cancel order (IOC), which is executed immediately. Any part of an order that is not fulfilled immediately will be cancelled.

For example, you place an IOC to purchase 100 shares in Company XYZ. Because it is an IOC order

• - Your order is placed immediately
• - If there is a matching purchase order for only 10 shares, and the 10 shares are not purchased, the order for 90 shares will be cancelled

Day Order

If there is a matching order, a Day order can be executed at any time during the market hours the same day.

For example, you place a Day Order to buy 100 shares of Company XYZ for Rs 10 per share. It's a Day Order, so the order can be filled at any time during the trading hours.

Good till Triggered (GTT), order

GTT order is Good Till Trigger Order. GTT orders allow you to purchase or sell orders at a limit price. These orders will be executed if the stock price reaches the specified price, also known as the Trigger Price before the GTT Order expires.

GTT orders are limit orders where the product type is delivery or margin. GTT orders cannot be placed in the intraday product category. GTT orders can be placed in the derivatives section. GTT orders in this segment can be executed as carry forward orders and expiry dates will apply.

For more information about GTT order 

After Market Order

AMO, as the name implies, allows you to place orders during non-market hours. This order will be activated in the next trading session. Orders using AMO are a great way to place orders at a specific price before market hours.