When trading in the Indian stock market, choosing the right order type is crucial for risk management, execution speed, and profit maximization. Whether you’re an intraday trader or a long-term investor, understanding the different types of stock market orders can significantly enhance your trading performance.
In this guide, we’ll cover:
✔️ Market Order, Limit Order, Stop-Loss Order
✔️ Bracket Order, Cover Order, Good-Till-Triggered (GTT)
✔️ Best order types for intraday, swing trading, and investing
🛒 1. Market Order (MO)
🔹 What is it? An order to buy/sell immediately at the best available price.
🔹 Best For: Quick execution in high-volume stocks
✅ Example:
- You place a Market Buy Order for 100 shares of Infosys at ₹1,500.
- The lowest available selling price is ₹1,502.
- Your order executes at ₹1,502.
💡 Pros & Cons
✅ Fast execution
✅ Useful for highly liquid stocks
❌ No price control (higher slippage risk)
📌 2. Limit Order (LO)
🔹 What is it? A buy or sell order at a specific price or better.
🔹 Best For: Traders who want price control
✅ Example:
- You place a Buy Limit Order for Tata Motors at ₹600.
- If the price drops to ₹600, your order gets executed.
- If the stock stays above ₹600, the order remains pending.
💡 Pros & Cons
✅ Ensures price control
✅ Reduces slippage risk
❌ No guarantee of execution
🚨 3. Stop-Loss Order (SL)
🔹 What is it? A risk-management order that automatically sells/buys a stock when a certain price is reached.
🔹 Best For: Protecting profits & minimizing losses
Types of Stop-Loss Orders:
1️⃣ Stop-Loss Market (SL-M) → Executes as a Market Order when triggered
2️⃣ Stop-Loss Limit (SL-L) → Converts into a Limit Order when triggered
✅ Example:
- You bought Reliance at ₹2,500.
- You set an SL-M order at ₹2,450.
- If Reliance falls to ₹2,450, your order triggers and executes at market price.
💡 Pros & Cons
✅ Reduces risk
✅ No need to monitor continuously
❌ SL-M may execute at a worse price in volatile markets
🎯 4. Bracket Order (BO)
🔹 What is it? A multi-leg order with:
- Entry Order (Buy/Sell)
- Target Order (Profit booking)
- Stop-Loss Order (Risk management)
🔹 Best For: Intraday traders who want automation
✅ Example:
- Buy TCS at ₹3,000
- Set Target at ₹3,100 and Stop-Loss at ₹2,950
- If any condition is met, the remaining orders are canceled
💡 Pros & Cons
✅ Automates profit & loss management
✅ Reduces manual effort
❌ Not available in all brokers
💼 5. Cover Order (CO)
🔹 What is it? A two-legged order combining:
- Entry Order (Market or Limit)
- Compulsory Stop-Loss
🔹 Best For: Intraday traders looking for high leverage
✅ Example:
- Buy HDFC Bank at ₹1,500
- Set Stop-Loss at ₹1,470
- Enjoy higher leverage (up to 10x)
💡 Pros & Cons
✅ Higher leverage
✅ Reduces risk with stop-loss
❌ Cannot modify stop-loss after placing the order
⏳ 6. Good-Till-Triggered (GTT) Order
🔹 What is it? A long-duration order that remains active until triggered.
🔹 Best For: Long-term investors who want to buy at a specific price
✅ Example:
- You want to buy HUL at ₹2,000 (current price: ₹2,100).
- Set a GTT Buy Order at ₹2,000.
- If HUL falls to ₹2,000 anytime, your order executes.
💡 Pros & Cons
✅ Ideal for long-term trading
✅ No need to monitor daily
❌ Not available on all brokers
🕵️ 7. Iceberg Order
🔹 What is it? Breaks a large order into smaller parts to reduce market impact.
🔹 Best For: HNI & institutional investors
✅ Example:
- You want to buy 10,000 shares of Infosys
- Instead of placing one large order, use an Iceberg Order (5 parts of 2,000 shares)
- This prevents price manipulation
💡 Pros & Cons
✅ Reduces market impact
✅ Helps execute large orders efficiently
❌ Not available on all platforms
📊 Comparison Table of Order Types
| Order Type | Best For | Price Control | Execution Speed | Risk Level |
|---|---|---|---|---|
| Market Order | Quick execution | ❌ No | ✅ High | ⚠️ High |
| Limit Order | Price-sensitive trades | ✅ Yes | ❌ Medium | ✅ Low |
| Stop-Loss Order | Risk management | ✅ Yes | ✅ High | ✅ Medium |
| Bracket Order | Automated trading | ✅ Yes | ✅ High | ✅ Low |
| Cover Order | Intraday leverage | ✅ Yes | ✅ High | ⚠️ Medium |
| GTT Order | Long-term investing | ✅ Yes | ❌ Slow | ✅ Low |
📌 Conclusion
Choosing the right order type can improve your trading accuracy and risk management.
✅ Intraday Traders: Use Market, Bracket, Cover Orders
✅ Swing Traders: Use Limit, Stop-Loss, GTT Orders
✅ Long-Term Investors: Use GTT, Limit Orders
