Introducing Bracket Orders – Phase 2

After successfully launching Bracket Orders in Phase-1, we are launching the much awaited Phase-2 version of bracket orders. With this implementation, you will be able to trade in all segments including, Equity, Equity F&O, Currency derivatives and most importantly, commodities too. We are among the handful of brokerages that offer commodity trading using Bracket Orders and we are the first discount brokerage in India to have launched it for the commodity segment. We have explained what bracket orders are and how to place a bracket order in the previous post. In this, you will learn the additional functionalities over and above what has already been introduced in the previous version of bracket orders.

But before explaining any new features, you must know that the stop loss and target prices must be entered as the desired profit/loss per share/lot as applicable. For example, assume that Bank Nifty near month futures are trading at 26800 and if you want to earn Rs. 100 per lot on Bank Nifty future, you should enter your target as 100. This effectively means that you want to book profits if the price moves 100 rupees in your favor and likewise if you have the maximum risk appetite to take a loss of 100 rupees, you must enter 100 as the stop loss input instead of the absolute value of Bank Nifty futures in this case.

New Features in Bracket Orders Phase-2

1. Market Order entry

In the improvised version, you can enter bracket orders using market orders. Previously, you could only do so using limit orders. Market Orders help save time for traders who are not too particular about the order execution price and just want to enter the trade as soon as possible. It’s really simple to enter this order as shown in the image below. As you can see the limit price entry is blurred out as the order will go through and execute at the best available bid/ask price.

2. Stop Loss Market (SL-M) entry

This order type is used when you want to enter into a trade after the price has crossed a particular level. Upon entering a stop price above the Current Market Price (CMP) when buying or entering a stop price below the CMP when selling, the order is pending until the price level is reached. When the price is matched, the order gets executed at the best available bid/ask prices. These types of orders are generally used by traders who want to buy/sell on breakouts or retracements. The image below explains how to enter bracket orders using SL-M entry:

3. Stop Loss Limit (SL-L) entry

This is a variation of the SL-M entry for bracket orders. It is almost the same except that instead of executing orders at any price after the stop price is triggered, SL-L orders help define the limits within which an order must be executed. It is important to note that the Limit price has to be higher than the stop price for buy orders and lower than the stop price for sell orders. Here’s how to enter bracket orders using SL-L orders:

How to Exit Bracket Orders

Bracket orders are exited automatically when either the target or stop loss order is executed because it is a one cancels the other (OCO) order. If traders want to exit bracket orders manually, it can be done by cancelling the pending orders from the order book. We have also introduced an emergency “Exit” button in the order book to exit bracket orders (BO) and cover orders (CO). It is helpful in the following circumstances:

1.When Leg-1 of the bracket order is not executed, you can cancel the pending order using the exit button. (Alternatively, you can cancel the pending orders)

2.When the position is open, you can close the position by clicking on “Exit”. (Alternatively, you can cancel one of the pending orders which is not yet executed).

3.When Leg-2 and Leg-3 are rejected, this is the only way to exit the order.

We have taken extensive feedback from traders and have implemented features which are of utmost importance in bracket orders. We will continue to improvise on our trading platforms with time. We encourage you to interact with us and give us your thoughts. It feels good to be the first discount broker in India to provide bracket orders for commodities segment. I want to let you know that we’re working on a couple of projects and will write about them soon. Until then, Happy trading!