TYPES OF ORDERS
A limit order is an order to buy a security at no more than a specific price, or to sell a security at no less than a specific price. Any unexecuted portion of the order remains as a pending order till it is matched
For example, you want to buy 100 shares of ABC Inc. at X50 and current market price is at X51. So you set the Quantity as 100 and Price as X50 in Buy window. Now your order will get executed at price >= X50
To place market order you can enter rate as "0"in the price field. A market order is an order to trade a stock at the best available market price. A market order to buy is executed at the ask price, and a market order to sell is executed at the bid price
For example, you wish to buy 800 shares of BHEL whose Bid-Ask spread looks like the following -
Market Depth of BHEL
|BEST 5 BIDS||BEST 5 ASK|
Now when you place a buy Market order by specifying the quantity as 800 and Price 0, the first 600 shares will be executed at the quoted ask price of X80. Thereafter, the remaining 200 shares are executed at X85 which is the next ask price. The average buy price for the entire 800-share order will be [(80 x 600) + (85 x 200)1/800 = X81.25.
STOP LOSS ORDER
Stop Loss order is used to limit the maximum loss on a position. It allows you to place an order only when the market price of the stock reaches or crosses a threshold price specified by you in 'SL Trigger Price'.
For example, let's assume that you own 100 shares of Company XYZ stock, for which you have paid X10 per share. You are expecting the stock to hit X12 sometime in the next month, but you do not want to take a huge loss if the market turns the other way. You set a stop-loss order defining SL Trigger price as 8.50 and SL Price as 7. If the stock goes down and touches X8.50, 5Paisa will automatically place a sell order to sell your shares at a price defined by you as SL price i.e. 7 in this case. Your shares will be sold at the best available price between 7 and X8.5 depending on buyers in the market.
TMO (BRACKET ORDER)
TMO order is a special 3-leg order type which allows you to place 3 orders in one click along with a trailing stop loss
1st leg - Entry Order (This would be initial order which can be modified until) executed
2nd leg - Profit Order (defined by Target Price)
3rd leg - Stop Loss Order (defined by the SL trigger price, SL price would be 0 by default, so once stop loss is triggered it will become a market order) Trailing Stop Loss - You can trail your stop loss using trailing stop loss feature. For ex. IF your buy order values were - Entry 100, SL -90, Profit -110, If you put trailing stop loss as 2, for every movement of 2rs in stock price in your favored direction (increasing in this case), your stop loss price would get modified by 2rs. So if stock reaches 102, SL price will become 92.
In this way your stop loss can be trailed automatically Once the Entry order gets executed, your 'Profit Order' and 'Stop Loss Order' will appear in your Orderbook as pending orders. Now, either 'Profit Order' or 'Stop Loss Order' will get executed. If the price hits the 'Target Price' then 'Profit Order' gets executed and the stop loss order gets cancelled automatically. Similarly when the stop-loss hits automatically the 'Profit Order' gets cancelled.
For example, You wish to buy 100 quantity of stock A at market price (CMP is 200) and keep X190 as stop loss and want to book your profits at X215. Oracket order allows you to punch three orders at the same time by defining Quantity as X100, SL Trigger Price as X190 and Target price as X215.
TMO (COVER ORDER)
It is two legged order in which entry order and stop loss order are defined with no target order. Trailing stop loss can be used in Cover order as well.