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Types of Orders for trading

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Posted by : NIFM
8 January, 2014, 3:57 PM
The system allows the trading members to enter orders with various conditions attached to them as per their requirements. These conditions are broadly divided into the following categories.   Time conditions Price conditions Other conditions   Several combinations of the above are allowed thereby providing enormous flexibility to the users. The order types and conditions are summarized below.   Time conditions   Day order: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 executed during the day, the system cancels the order automatically at the end of the day.   Immediate or Cancel (IOC):An IOC order allows the user to buy or sell a contract as soon as the order is released into the system, failing which the order is cancelled from the system. Partial match is possible for the order, and the unmatched portion of the order is cancelled immediately.   Price Condition   Market Price:Market orders are orders for which no price is specified at the time the order is entered (i.e. price is market price). For such orders, the trading system determines the price.   Limit price: An order to a broker to buy a specified quantity of a security at or below a specified price, or to sell it at or above a specified price (called the limit price). This ensures that a person will never pay more for the futures contract than whatever price is set as his/her limit. It is also the price of orders after triggering from stop-loss book. Stop loss:This facility allows the user to release an order into the system, after the market price of the security reaches or crosses a threshold price  e.g. if for stop-loss buy order, the trigger is Rs. 42.0025, the limit price is Rs. 42.2575, then this order is released into the system once the market price reaches or exceeds Rs. 42.0025. This order is added to the regular lot book with time of triggering as the time stamp, as a limit order of Rs. 42.2575. Thus, for the stop-loss buy order, the trigger price has to be less than the limit price and for the stop-loss sell order, the trigger price has to be greater than the limit price.   Other Conditions   Pro:Pro means that the orders are entered on the trading member’s own account. Cli:CLi means that the trading members enters the orders on behalf of a client.

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