This is a special order type that is a combination of a Market/Limit Order and a Stop-Loss Order. It has 2 legs: the first leg is always a Limit/Market order and the second leg is a Stop-Loss Order.
In case the 1st leg is a buy (Market/Limit) Order then your second leg would be a sell (Stop-Loss) Order. In case the 1st leg is a sell (Market/Limit) Order then your second leg would be a buy (Stop-Loss) Order. Both orders are interconnected. The order can be modified up to the last traded price (LTP) in the case of a favorable market movement.
The cover order has a major advantage in terms of the margin you get for placing that trade. Since you are ready to bear only a certain loss your losses are limited on that order. This means you need to pay only the amount of loss you wish to bear and not the entire amount.
For example, if you are buying a stock at ₹100 & the maximum loss that you wish you bear is ₹5 then you order will get closed if the stock reached ₹95 (₹100 - ₹5). You get a major advantage in a Cover Order in terms of margin. Just like all Intraday Orders, we close the Cover Order position at 3:00 PM.,
To place a cover order you will need to select CO in the order complexity section while placing an order. You will need to enter the Limit Price and the Stop-Loss price while placing a Cover Order.
Visit the How to place an order page to learn how to place an order on the app.