Types of Orders

  • Delivery vs Intraday:

    Once you have made a decision concerning the stock you would like to purchase, you have to select the 'order for'. 'Order for' (screenshot) simply means the time limit you would like to hold this particular order for.

    • When an individual selects a ‘DELIVERY’ trade they are only executing one side of the transaction on that particular day. In other words, they can hold onto this trade for more than a day depending on their investment plan, similar to conventional investments.
    • On the other hand, if an individual selects the ‘INTRADAY’ option they have opted to execute both the legs on the transaction (buy & sell) on the same day.
    • For example: If an investor has executed an intraday order and purchased 100 shares of company TCS, the shares that have been purchased would also have to be sold on the same day before the market closes.

      The same goes for delivery and intraday sell orders. Investors will have to close the order depending on the type of order they execute. Therefore, selecting the ‘order for’ or timeline of the order is extremely important and solely depends on the investor's outlook on the market.
  • Limit Order Vs Market Order:

    • A ‘LIMIT’ order is an order to buy or sell a security at a specific price. A buy limit order can only be executed at the limit price or lower, and a sell limit order can only be executed at the limit price or higher. To illustrate, if an investor wants to invest in ICICI bank and wants to buy a singular stock for ₹350. They can simply place a limit order for ₹350 and the order will only get executed when the price of ICICI bank stock reaches ₹350 or lower.
    • Consequently, a ‘MARKET’ is an order to buy or sell a security instantly. This type of order guarantees that the order will be executed but does not guarantee the price it will get executed at.
    • Usually, a market order will get executed near the current bid or ask price, however, it is important for investors to remember that the last traded price is not necessarily the price at which the order will be executed.

    • While placing a buy or sell ‘MARKET’ order you first have to enter the quantity of shares, in this case the quantity is 800.
    • The price remains 0 due to constant market fluctuations.
    • Upon clicking on the ‘buy’ or button at the bottom of the screen the order will get executed. The first 600 shares will be bought at ₹80 (table above) at the current ask price and the remaining 200 shares will be purchased at ₹85 which is the next ask price. This will make the average buy price ₹81.25.
    • For a sell order the first 650 shares will be sold at 75 and the remaining 150 shares will be sold at 74 making the average sell price ₹74.81.
  • Stop Loss Order:

    A stop-loss order is usually placed to minimize losses on a position. When an order has been placed to buy or sell a stock the order is only executed when the stock reaches or crosses a specified price point also known as the ‘SL Trigger Price’.

    There are 2 types of Stop-Loss orders:

    1. SL order (Stop-Loss Limit) = Price + Trigger Price
    2. SL-M order (Stop-Loss Market) = Only Trigger Price

    Buy order:

    • A buy SL order is placed when a user has a sell position on a stock.
    • For example, let us assume you have shorted 500 shares of Yes Bank at INR 20 per share. You anticipate the price to decrease, however, you do not want to incur a loss of more than INR 5 per share. By placing a buy stop-loss order, you are instructing the trading terminal to exit the shares in case the price of Yes Bank increases to 25.
    • This means you have gone short on Yes Bank at INR 20 and the maximum loss you are willing to take on this trade is INR 5 (25-20) per share. As long as the price of the stock does not increase beyond 25, the stop loss order will not be executed.
    • The trigger price is specified so that the SL order would transition from passive to an active order. The trigger price has to be lower or at least equal to the SL price. In this case, when the stock price increases to INR 24, the trigger is hit and the stop-loss order gets activated.
    • For a Buy Stop Loss order, SL price > SL trigger price.

    • Note: To place an SL order you have to select "STOP LOSS" in order type highlighted in the screenshot.

    Sell order:

    • A sell SL order is placed when a user has a buy position on a stock.
    • For example, let us assume you buy 100 shares of company Globus Spirits Ltd at ₹140 per share. You anticipate the price to increase however you do not want to incur a loss of more than ₹10 per share. By placing a sell stop-loss order, you are instructing the trading terminal to exit the shares in case the price of Globus Spirits drop to 130.
    • This means you have gone long on Globus Spirits at 140 and the maximum loss you are willing to take on this trade is INR 10 (140 -130) per share. As long as the price does not fall below 130, the stop loss order will be dormant.
    • The trigger price is specified so that the SL order would transition from passive to an active order. The trigger price has to be higher or at least equal than stop-loss price. In this case, when the stock price drops to INR 132, the trigger is hit and the stop-loss order gets activated.
    • For a Sell Stop Loss order, SL price < SL trigger price.

  • Cover Order Vs Bracket Order:

    To put it simply, a Cover Order (CO) is a combination of a market order and a stop-loss order. In other words, you can buy or sell a stock as a market order and additionally have the ability to specify an ‘SL Trigger Price’ and ‘SL Price’ to reduce your exposure to market risks.

    Furthermore, a Bracket Order (BO) is an advanced intraday three-legged order that is accompanied by a compulsory Target and Stop Loss Order.

    Order 1: This can be either a Limit or a Market Order. All you have to do is enter the Price you would like to purchase a particular stock. If you would like to place a market order, then keep the price as 0.

    Order 2: This is the stop-loss leg where you need to define the SL Trigger Price and SL Price. You can also utilize a trailing stop loss. A trailing stop loss is basically a stop loss that keeps on changing depending on price movement. To illustrate, if you have bought HDFC stock at ₹1033 and the SL Trigger Price is set to ₹980, If the stock price rises to ₹1100 the SL Trigger Price will also rise by ₹53 to ₹1033. Therefore, a trailing stop loss always maintains the same price difference.

    Order 3: This part of the Bracket Order determines the profit point of the position. For example, if you have set a Target Price as ₹115, the sell profit order will be executed as soon as the price reaches that point.
    The same goes for Sell cover orders, however it is practiced inversely.

    This type of order is usually used by traders when they are using a high margin helping them stay in complete control of the risks involved. Click here to find a list of scrips that support BO/CO orders.

  • Validity Types:

    Day Order Validity:

    A Day order, as the name suggests, is an order which is valid for the day on which it is entered. If the order is not matched during the day, the order gets cancelled automatically at the end of the trading day.

    Immediate Or Cancel (IOC):

    IOC order allows a trading member to buy or sell a security as soon as the order is released into the market, failing which the order will be removed from the market. Partial match is possible for the order, and the unmatched portion of the order is cancelled immediately.

  • Advanced Order Types

    • Basket Order

      A basket order is used to buy or sell a group of securities simultaneously. Basket order is essential for institutional investors and investment funds who wish to hold a large number of securities in certain proportions.

      Even if you use the basket order facility with multiple scrips and place it all at one time, different order numbers will be generated for different contracts and hence the brokerage will be different for every contract on the basket order and not for all of them together.

      Basket orders are available on IIFL TTexe application under Tools > Basket Order as shown below

      After clicking the basket order button, a window will appear as shown below:

      • A maximum of 100 scrips can be added in a single basket order.
      • After filling all the details, click on add button and use the same process to add multiple contracts. As shown in above image, the current basket consists of 3 scrips.
      • Once all the contracts/stocks are added, you can either place the order by clicking on the Place button or you can export the same order to an Excel and save it on the computer. Whenever you wish to place the order, you can use the browse button and upload the Excel and place the order. The file format accepted for uploading the file are .txt, .csv, .xls, .xlsx.
      • Orders can be either placed as limit order or market order; if a market order is placed it will get executed immediately, if it is a limit order it will remain pending till it gets executed.
    • Bulk Orders

      Bulk orders are similar to basket orders. If a user wants to buy/sell multiple stocks at once from the investment cart, he/she can use bulk order to execute the order.

      In order to place bulk orders, you need to click on Tools tab and click Bulk orders as shown below:

      In order to place a bulk order, you can create a file by adding stocks that you wish to buy/sell at once and then place the order. You can also upload a file that has the details of scrips in the format as shown in the image below:

      If a user wishes to create a file from the trading platform, he/she can do so by filling in all the details for the stocks that needs to be bought or sold.

      As shown below, when a user uploads a file, all the stocks mentioned in the file will be displayed in the dashboard. Once ready, user can now place the order to buy/sell multiple scrips at the same time.

    • Simultaneous Order

      A simultaneous order can be used to place a buy/sell order for same/different scrips. This allows a user to place two different orders using a single instruction.

      Only two scrips can be simultaneously placed using this order.

      Simultaneous order can be found under Market > Simultaneous Order as shown below:

      • A simultaneous order can either be placed as a Limit order or a Stop loss order and the order is a VTD order.
      • User can also place orders under F&O and Currency.

      For example, in the image shown below, there are two orders that can be place simultaneously:

      • Buy Equity order for Globus Spirits Ltd with a target price of 140 and a stop loss of 132. The order is VTD and valid till 17/07/2020.
      • Sell Equity order for UPL with a target price of 29.10 and stop loss of 23.1. This is also a VTD order.

    • Spread Order

      A spread order is a trading strategy which involves going long (buying) in one contract whilst shorting (selling) another contract of the same or different underlying.

      Spread orders are normally executed in the Futures segment and look at capitalizing on the difference between the prices of the executed legs referred to as the "Spread".

      Types of Spread Trades:

      1) Calendar Spread: Involves entering into long & short position of the same underlying asset with 2 different expiry periods.

      For example: Assume Reliance July futures with an expiry date of 30 July 2020 is trading at 1800 and August futures dated 27 August 2020 trading at 1900. You feel that this difference of 100 points between both the months is quite a bit and this will reduce to 60 points in the next few days, how do you profit from this idea? The idea is to profit without taking any naked directional risk, i.e., immaterial of the market going up or down, you should be able to profit if this difference between both the futures reduces from 100 to 60 points.

      This situation can be used to implement Calendar spread in two different orders:

      1. Buy Reliance Futures 30 July 2020 at 1800
      2. Sell Reliance Futures 27 August 2020 at 1900

      When the difference is lesser than 100 points, you make profits, and if the difference is more than 100 you make losses.

      Below are the steps involved in placing a spread order from TTexe platform:

      1. Spread order can be found under Market > Spread Order as given below:

      2. User can then go long (buy) on one contract and short (sell) on other contract by specifying appropriate strike price and underlying price of the security.

      In the image below, we can see that Reliance Futures July is buy and Reliance Futures August is sell. The difference in points is given in price as 100. A standard market lot size is 505 units.

      • Hardly any market risk
      • Margin requirement to setup a calendar spread is very less

      For example: The margin required for 1 lot of Nifty is around INR 1.45 lakhs, so in case you have 2 lots the margin requirement should ideally be INR 2.9 lakhs.

      But because this is a calendar spread the margin requirement for both the positions together due to the reduced risk is only INR 20000 and not INR 2.9 lakhs.

      2) Inter commodity spread: Trading and trying to cash in on the difference between 2 closely derived Commodity contracts.

      For example: A 'Crack Spread' which involves purchasing crude oil futures and taking an offsetting position by refined products of crude oil like gasoline, diesel etc

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