Search for an answer or browse help topics to create a ticket
View all categories

Why is the exit leg of bracket order SL instead of SL-M?

The exit leg of bracket orders (BO) has been changed from the Stoploss-market (SL-M) order type to Stoploss (SL) due to an update in the exchange mandates. The exchange requires brokers to use "Market Price protection" with the price protection percentage set to a certain % of the LTP (Last trade price). You can refer to this circular from NSE.

[Market Price protection functionality gives an option to limit the risk of a market order, within a pre-set percentage of the Last Traded Price (LTP)]

So, Assume, if the price protection % is set to 20 % (as per our RMS policy based on Risk modelling), and you buy a scrip at 1000 using BO with target entered as 50 and SL trigger entered as 20, there will be one Limit sell order at 1050 and one Stop loss order with the trigger at 980 and the limit price at 800.

So if the price falls to 980 then the SL will be triggered and the sell order will get executed between at the next best bid available and the range of execution will be limited to 800. 

If you modify your SL trigger, with every modification the SL price will change based on the LTP.

Note:

1. Presently the market protection percentage has been set at 20% of LTP. Also if 20% is beyond circuit limits then the stop-loss limit order will sit at circuit limit price.

2. If the trigger price of your Stop loss order is outside the circuit limits, then your stop loss order will be at the circuit limit price.