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Type Of Orders

When you are about to place a buy or sell order, there are multiple types of orders that appear on your trading screen. Some of these orders execute immediately, while some execute at a particular price and time or some have exceptional conditions attached to them.



There are different types of orders for trading.

  1. Market Order

  2. Limit Order

  3. Stop-loss Order (SL)

  4. Stop-loss market Order (SLM)

  5. Stop-loss limit Order (SLL)

  6. bracket order (BO)

  7. After Market Order (AMO)

  8. Cover Order (CO)


MARKET ORDER

A market order is a trade order to purchase or sell a security at the current market price. A market order generally will get executed at or near the current bid (for a sell order) or ask (for a buy order) price. Market order gets executed almost immediately. This type of order guarantees that the order will be executed, but does not guarantee the execution price.


LIMIT ORDER

A limit order is an order to buy or sell a security at a specific price. Unlike market order, where the trader doesn’t have any control over price, in a limit order, the trader will set the price.

If a trader places a limit order to buy shares at Rs. 100, the shares will be bought at Rs. 100 or lower.

If the trader places a limit order to sell shares at Rs. 100, the shares will be sold at Rs. 100 or higher.


STOPLOSS ORDERS

A stop-Loss order is one of the most important types of orders where a trader can limit his or her losses by exiting a trade if a specific price is reached. Huge losses can be controlled through stop-loss orders.


Stoploss Market Order is a type of order, where the trader sets a trigger price to exit the trade if the price goes against his expectation.

Suppose there is a sell position at Rs.100 and the trigger price for stop-loss is placed at Rs. 102. If the price hits Rs.102, it will place a buy order to exit the trade. The buy order will get executed at the market price. In the stop-loss market order, the losses and the slippage can be more if there is high volatility in the price.


Stoploss limit order is almost similar to stop-loss market orders but it does not get executed at market price. It will get executed at the specified limit price set by the trader.

In these types of orders, the trader will have to set a trigger price and a limit price.

eg: We place a stop-loss limit sell order when we already have a long position.

A long position at price – Rs.100

Stop-loss limit price- Rs.90

Trigger price – Rs.91

If the price falls to Rs. 91, it will trigger a sell order at Rs. 90. And if the price gets to Rs. 90, it will get executed.


BRACKET ORDERS (BO)

Bracket order is one of the types of orders in which 3 orders are placed into one. You can enter into a new position with the target, Stoploss, Trailing stop-loss etc. All Bracket orders are limit orders. For every bracket order that gets executed, we have 2 corresponding orders that get placed automatically. One is the target order and another is the stop-loss order.


AFTERMARKET ORDER (AMO)

Aftermarket orders are types of orders that are placed beyond market hours. The normal market hours are between 9.15 am to 3.30 pm. But, the entire period outside market hours cannot be used to place aftermarket orders. AMOs can also be set at market price.


COVER ORDER (CO)

Cover order is one of the types of orders by which we can enter a position along with a stop-loss in the same order form.


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