This nudge is displayed when you place a limit order above the LTP for buy orders and below the LTP for sell orders. In these cases, the exchange executes the limit order as a market order, which is also called a market protection order. This is because a limit order allows you to buy or sell an instrument at a specific price or a better price.
Example scenario
The LTP of Axis Bank is ₹965.55. The best bid and offer are at ₹965.50 and ₹966.00, respectively.
Buy limit order
- If you still want to buy the stock at ₹970, you can use stop-loss (SL) or Good Till Triggered (GTT) orders.
- Buy limit orders are executed at the limit price or lower than the limit price. If the limit price for a buy order is higher than the LTP, your order will be executed as a market order since the LTP is lower than the limit price.
- You place a buy limit order at ₹970 when the LTP of Axis Bank is ₹965.55. Your order is executed at the market price since there is an offer to sell at ₹966, which is lower than the limit price of ₹970.
- You receive the stock for ₹966 instead of ₹970 (₹4 less than what you were willing to pay).
Sell limit order
- Sell limit orders are executed at the limit price or higher than the limit price. If the limit price for a sell order is lower than the LTP, your order will be executed as a market order since the LTP is higher than the limit price.
- You place a sell limit order at ₹960 when the LTP of Axis Bank is ₹965.55. Your order is executed at the market price since there is an offer to buy at ₹965.50, which is higher than the limit price of ₹960.
- Your stock is sold for ₹965.50 instead of ₹960 (₹4.50 more than what you were willing to sell for).
- If you still want to sell the stock at ₹960, you can use SL or GTT.
This nudge is displayed only when the limit price is greater than or less than the LTP by 2% for equity and futures and 5% for options.