All about orders

Each and every one of the trades comprises of separate orders that are applied together to form a complete trade. All trades will have a minimum of two orders: one to enter the trade, and another to exit. A single order can either be a buy order or maybe a sell order. When a trader enters with a buy order, then he will exit with a sell order and vice versa.

The different types of orders

1. Market order

To buy /sell a commodity at the greatest obtainable price is a market order. Normally, this kind of order will be carried out instantly. On the other hand, the price at which this order will be carried out will not be guaranteed.

2. Limit order

A limit order is an order that puts a restraint on the price you wish to pay to buy a commodity or the price you wish to acknowledge to sell a commodity. Therefore, a limit order ensures a price, but performance is unsure. This is due to the fact that the commodity may not attain the price at which the order was positioned at the intraday trading.

  • Buy limit: defines the maximum price that the purchaser will purchase.
  • Sell limit: determines the least price at which the consumer will sell.

3. Stop Loss order

Stop orders are same as market orders but they are only processed when or if the market attains a particular price. Stop orders are actioned as market orders, hence if the stop/trigger price is hit, the order will at all times get fulfilled, but not essentially at the price that the dealer planned. Stop orders will set off when the market trades at or past the stop price. The stop price has to be more than the present price for a buy order, and below the present price for a sell order. Stop orders can be applied to enter a trade, and also to exit.

4. Stop Limit Orders (STPLMT)

Traders will generally mix a stop and a limit order to modify what price they obtain. When utilizing a stop limit order, the stop, as well as limit prices of the order, will not be same. Stop limit orders will continue pending till someone else is ready to carry out at the stop limit order prices, or better.  A “Stop-Limit order” is a cross order with attributes of both stops and limit orders. This order has to be triggered at a price which is equal to or more than the confirmed limit.

  • Buy stop-limit orders are set higher than the market and placed to trade equal to or higher than the stop price. As soon as the order is touched, it turns into a limit order to buy the futures contract at a cost equal to or less than the limit fixed.
  • Sell stop-limit is the opposite of a buy stop-limit and it is placed at or below the stop price. Once it is triggered, it turns out into a limit order to sell the futures contract at a cost equal to or more than the limit.

5.Market-if-touched order

A market-if-touched order (MIT) is an order to purchase or deal futures contracts that are executed at the first obtainable price after a particular price has been attained. An MIT order is not same as it triggers a filled market order, except for a locked limit meaning there is no trading.

  1. Buy MIT trades below or equal to the fixed price and sets the order in action, which turns into a market order.
  2. Sell MIT trades equal to or more than the fixed price and sets the order in action, which turns into a market order.

Final words

It is sensible to set a ‘limit order’ at a price range that is nearer to the preceding day’s closing price rather than a market order. This will help you to shield yourself from purchasing at a price that is very high or trading at a price that is very less. This assists you avert the likelihood of receiving a freak rate, as market orders are accomplished at the most excellent feasible counter rate.

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It is, therefore, important to learn both the pros and cons of intraday trading to get a better idea of how this market works and how exactly you can grow your money. In this post, we will walk you through a few advantages and disadvantages of intraday trading. So, keep reading to learn more.

• Beware of fixed/guaranteed/regular returns/ capital protection schemes. Brokers or their authorized persons or any of their associates are not authorized to offer fixed/guaranteed/regular returns/ capital protection on your investment or authorized to enter into any loan agreement with you to pay interest on the funds offered by you. Please note that in case of default of a member claim for funds or securities given to the broker under any arrangement/ agreement of indicative return will not be accepted by the relevant Committee of the Exchange as per the approved norms.
• Ensure that pay-out of funds/securities is received in your account within 1 working day from the date of pay-out.
• Be careful while executing the PoA (Power of Attorney) – specify all the rights that the stock broker can exercise and timeframe for which PoA is valid. It may be noted that PoA is not a mandatory requirement as per SEBI / Exchanges.
• Register for online applications viz Speed-e and Easiest provided by Depositories for online delivery of securities as an alternative to PoA.

• Do not keep funds idle with the Stock Broker. Please note that your stock broker has to return the credit balance lying with them, within three working days in case you have not done any transaction within last 30 calendar days. Please note that in case of default of a Member, claim for funds and securities, without any transaction on the exchange will not be accepted by the relevant Committee of the Exchange as per the approved norms.

• Check the frequency of accounts settlement opted for. If you have opted for running account, please ensure that your broker settles your account and, in any case, not later than once in 90 days (or 30 days if you have opted for 30 days settlement). In case of declaration of trading member as defaulter, the claims of clients against such defaulter member would be subject to norms for eligibility of claims for compensation from IPF to the clients of the defaulter member. These norms are available on Exchange website at following link: NSE, MCX

• Brokers are not permitted to accept transfer of securities as margin. Securities offered as margin/ collateral MUST remain in the account of the client and can be pledged to the broker only by way of ‘margin pledge’, created in the Depository system. Clients are not permitted to place any securities with the broker or associate of the broker or authorized person of the broker for any reason. Broker can take securities belonging to clients only for settlement of securities sold by the client.

• Always keep your contact details viz. Mobile number/Email ID updated with the stock broker. Email and mobile number is mandatory and you must provide the same to your broker for updation in Exchange records. You must immediately take up the matter with Stock Broker/Exchange if you are not receiving the messages from Exchange/Depositories regularly.

• Don’t ignore any emails/SMSs received from the Exchange for trades done by you. Verify the same with the Contract notes/Statement of accounts received from your broker and report discrepancy, if any, to your broker in writing immediately and if the Stock Broker does not respond, please take this up with the Exchange/Depositories forthwith.

• Check messages sent by Exchanges on a weekly basis regarding funds and securities balances reported by the trading member, compare it with the weekly statement of account sent by broker and immediately raise a concern to the exchange if you notice a discrepancy.

• Please do not transfer funds, for the purposes of trading to anyone, including an authorized person or an associate of the broker, other than a SEBI registered Stock broker.

• Do not deal with unregistered intermediaries (who are not registered with SEBI/Exchanges).

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