Yes, you can place two orders of the opposite transaction type (buy/sell) for the same instrument, even if the required margin for the second order is not available, as long as you have a positive cash balance. This applies to both NRML and MIS product types.
Example scenario
- Assuming your available balance in your trading account is ₹1 lakh, you bought NIFTY futures at 11300, with a margin blocked of ₹96,000.
- To limit your losses at 11275, you place a stop-loss order at 11275. This exit order does not require any additional margin since it signifies your intention to exit your current position.
- If you wish to set a target price at 11350, you can place another sell order to open a new short position at 11350. This is possible only if your account's available balance prior to initiating the NIFTY buy was higher than the required margin (₹96,000) and you have a positive account balance.
- The exchange will consider the first executed order as the exit order, and the margins blocked for your open position will be released.
- The exchange will use the released margins and the free cash in your trading account to open a new position based on your second order.
- You should remember to cancel your stop-loss order if your target order is executed, and vice versa. Alternatively, you can use a GTT (Good Till Triggered) order.
Did you know? This is not applicable for stocks using CNC product type.