3. Order Types

The order type controls how and when your trade gets executed. Picking the wrong one is a common rookie mistake.

The two basics

Market order

• “Buy/Sell right now at whatever price is available.”
• Pros: Guaranteed execution.
• Cons: No price control. In illiquid stocks you can get a terrible fill (slippage).
• Use when: Liquidity is high and you must get in/out immediately.

Limit order

• “Buy at ₹X or lower” / “Sell at ₹X or higher.”
• Pros: Price control.
• Cons: May never execute if the market doesn’t reach your price.
• Use when: You have a target entry price and aren’t in a hurry.

Stop-loss orders

A stop-loss (SL) is a conditional order that activates when price hits your trigger.

SL (Stop-Loss Limit)

• You set a trigger price AND a limit price.
• When trigger hits → a limit order is placed at your limit price.
• Risk: In a fast-moving gap, price may blow past your limit and the order won’t fill.

SL-M (Stop-Loss Market)

• You set only a trigger price.
• When trigger hits → a market order fires.
• Risk: Slippage in volatile moves, but execution is (almost) guaranteed.

Beginner rule: Use SL-M unless you have a specific reason. Getting filled matters more than getting the perfect price when your thesis is wrong.

Example

You buy ABC at ₹100. You want to risk only ₹5/share.

Order type	Trigger	Limit
SL	₹95	₹94.50
SL-M	₹95	— (market)

GTT — Good Till Triggered

• The order sits at the broker (not the exchange) until your trigger fires.
• Lifespan: typically 1 year.
• Great for swing traders and investors who don’t want to watch the screen.
• Most retail brokers (Zerodha, Upstox) support single-leg and OCO (one-cancels-other) GTTs.

Use case: You want to buy HDFC Bank if it dips to ₹1,400, but you’re at work all day.

Product types — how long the position lives

This is separate from order type and equally important.

Product	Lives for	Leverage	Notes
CNC	As long as you want	None (you pay full ₹)	Shares hit your demat by T+1
MIS	Same trading day	~5x for most stocks	Auto-squared off ~3:20 PM
NRML	Until F&O expiry	Per SEBI margin rules	F&O segment

Common pitfall

Buying a stock with MIS thinking you “own” it. You don’t — at 3:20 PM the broker will auto-square-off, often at a loss after brokerage. If you intend to hold, always select CNC.

Order validity

Validity	Meaning
DAY	Cancels at end of session if unfilled (default)
IOC	Immediate Or Cancel — fills whatever is available instantly, cancels the rest

AMO — After Market Order

Place orders outside market hours; they queue up and fire at the next open. Useful if you have a day job and want to act on after-close news (carefully — gaps can hurt).

Putting it together — anatomy of a real trade

You want to swing-trade Tata Motors, expecting a breakout above ₹950.

1. Entry: SL order, trigger ₹950, limit ₹952. Product: CNC.
2. Stop-loss: Once filled, place SL-M at ₹925 (risking ₹25/share).
3. Target: Limit sell at ₹1,025 (reward ₹75/share — that’s a 1:3 R:R).

Or use a GTT-OCO that holds both the SL and target — whichever triggers first cancels the other.