The types of Orders that you can place on Upstox can be divided into two broad categories: Simple orders and Complex orders.
Types Of Simple Orders:
A limit order is when you wish to purchase or sell a stock at a certain price. When you place a limit order it will be executed only when the stock reaches that price. When you select a limit order while buying stocks remember to enter a limit price below the market price.
Similarly, when you select a limit order while selling stocks remember to enter a limit price above the current market price.
A market order is when you wish to purchase or sell a stock at the prevailing market price. Once your order is placed, it will be executed at the current market price.
In order to limit the losses, you might face if prices move against your trade you can place a stop-loss buy/sell order.
Such orders are primarily meant to limit your losses on a trade. The price you mention in the stop-loss order is the highest risk (losses) that you are ready to take on that stock.
A stop-loss order can be a limit order or a market order:
-Stop-Loss Limit Order:
A stop-loss limit order will be executed at the price that you want your order to be executed at. The stop-loss is a mere trigger to validate the order. In this kind of stop-loss order, you need to enter a trigger and the limit price. Here's an example to understand this kind of order better:
Suppose you hold a buy position at ₹100 and you want to limit your losses in the falling market, then you can place a sell stop-loss limit order where you can place your trigger price at ₹96 and limit price ₹95. Once the market price reaches the trigger price of Rs 96, your limit order gets activated and the order gets executed at the best available price above ₹95.
Similarly, if you hold a sell position at ₹100 and you want to limit your losses in the rising market then you can place a buy stop-loss limit order where you can place your trigger price at ₹104, and limit price at ₹105. Once the market price reaches the trigger price of ₹104, your limit order gets activated and the order gets executed at the best available price below ₹105.
If your limit order is not executed due to market volatility, then the order will be shown as a pending order. Once the market price reaches the limit price the order will get executed.
In case of a buy stop-loss limit order the Trigger Price < Limit Price and in case of a sell stop-loss limit order the Trigger Price > Limit Price.
-Stop-Loss Market Order:
In a stop-loss market order, you enter a trigger price. The trigger price is the price at which you wish to start buying/selling your shares at the prevailing market rates to avoid any further losses.
So, a stop-loss market order will get triggered only once your stock reaches that trigger price, and then the order becomes a market order, sent to the Exchange to be executed.
Types Of Complex Orders:
Mentioned above were simple orders with just one leg. However, there are also two complex orders, which combine two legs.
-Cover Order (CO):
This is a special order type that has a market order and a stop-loss market order attached to it. In this type of special order, the first leg is always a limit/market order; once executed, the second leg (the stop-loss market order) is placed. The stop-loss order cannot be cancelled. Both orders are interconnected. The order can be modified up to the Last Traded Price (LTP) in the case of a favorable market movement.
This is a special order type that has two different legs: first Leg: Limit/market Order second Leg: Stop-loss market order.
-After-Market Order (AMO):
AMO or after-market order is for those people who are busy during market hours but wish to participate. You can plan your orders at leisure before the market opens and place an order after the market closes.
Below are the AMO timings for your reference:
-One-Cancels-The-Other Order (OCO):
A one-cancels-the-other order (OCO) is a pair of conditional orders where, if one order gets executed, then the other order is automatically canceled. An OCO order is a three-legged intraday order.
The first leg of the OCO is buying or selling the actual stock.
The second leg is the stop-loss just like a cover order.
The third leg is a takeaway profit order. This means that if a stock reaches a certain price in profit your order automatically gets squared off and you make the profits you intended to make.
An OCO order combines a stop-loss order with a limit order and when either the stop-loss or limit price is reached, the order gets executed and the other order automatically gets canceled. Experienced traders use OCO orders to mitigate risk and to enter the market.