A Cover Order is a special type of order through which the user can take an intra-day position and take advantage of extra exposure while being protected through a stop loss order.
Simply put, the system will place two orders simultaneously:
- a market or limit order and
- a corresponding stop loss market order
If the trigger price is hit, the stop loss order gets executed as a market order. The combination of both these orders being placed simultaneously is known as a Cover Order. Cover Orders help you limit any potential losses that could be incurred on a position.
Note: Since a cover order is placed along with a compulsory stop loss market order, the SL-Lmt and SL-Mkt order types are disabled for cover orders.