Below are the primary benefits of cover orders for intraday traders:

  1. Discipline: Putting a stop loss while trading intraday is very important. However, most traders usually keep a SL in mind rather than on the system. Even if we put a SL order, we most likely cancel it rather than letting it get triggered.While placing a cover order, you have to mandatorily place a stop loss order within a a specified range from where you are entering the contract and cannot cancel it. The SL order can be modified, but within the specified range itself. This way you are also limiting your losses very fast if there are any.
  2. Higher Exposures: Since the losses are limited, the risk you are taking reduces. Hence, we can also offer a higher leverage. Cover orders are meant only for intraday traders as one has to square off all his/her positions by 3.10 pm. For example,
    1. Buying 25 qty Nifty futures at 8000 in MIS would require aproximately Rs 8,200 in margin. With cover orders, the requirement will be Rs 5,100. You save margin of Rs. 3100!

    2. Buying 1 lot of Silver at Rs 38,000 in MIS would require Rs 29,000 in margin. With cover orders, the requirement will be Rs 19,000. You save margin of Rs. 10,000!

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Comments

  1. anshul

    if i buy a script at market, then after purchasing at market , i want to use stop loss (to protect loss due to down side price movement); along with want to put a target price above the purchased price( to get the profit in case price moves up). I want to do it in a one go or you may in one order. what to do?

    1. Trade Smart Online

      Hello Anshul,
      This type of order is called as “Bracket order”. We are working on it and soon you would be getting Bracket Order in which you can place stop loss and target price simultaneously for any buy/sell order.

  2. Pingback: What is a Cover Order? | Knowledge Base

  3. MAHENDRA

    I put sell/buy cover order with sl in limit provided, my order executed and sl active, i want to know that its possible to place tgt price for buy/sell respectively for that cover order. if yes, then how ??

  4. Trade Smart Online

    Hi Mahendra,
    In Cover order, you can place a separate target order but that utilizes your extra margin. In order to avail more exposure with less margin you can place Bracket Order in which you will be able to place an order with stop loss and target price simultaneously without paying extra margin. For more information, please refer the link. http://blog.tradesmartonline.in/?s=bracket+order

    1. Trade Smart Online

      Hello Sumit,
      Currently, Cover Order facility for Mobile Application is not available from Exchange. However, you can login your browser based from mobile and enjoy cover order facility from browser based login.

  5. Ashok kumar vaid

    For activating cover order ,bracket order what i have to do. Are both type of orders can be placed in now software.
    Ashok Vaid

    1. Trade Smart Online

      Hello Ashok Kumar Vaid,
      In order to activate Cover order and Bracket order facility, you are required to shift your account to NEST Trading terminal. To shift your account, please email us at support@vnsfin.com.

    1. Trade Smart Online

      Hello Sorabh,
      Yes, in case of cover order stop loss is compulsory with certain price limit that is set for placing stop loss trigger price. This limit varies from segment to segment or you can check for default range provided on order placing window.

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