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How will NSE’s self-trade prevention mechanism affect Cover Orders?

NSE in 2015 introduced this mechanism to prevent self-trade for a client who has both buy and sell orders open for a certain scrip at the same price. The details of the mechanism are covered in this NSE document .

In the case of CO, the position will be left hanging with either no target or SL order, if a client places a counter order matching the CO Stoploss or Target orders.

Example:

1. If you place a Buy CO at market price(LTP is 100) with a stop loss of 99(Both of these orders get placed at the exchange simultaneously). Before the execution of the 1st leg if the scrip falls to 99, the SL order will get triggered.

Note: If your CO is left hanging, you can either square it off by taking a counter order to your hanging position using NRML or you can call up our dealer desk at 080 4718 1888 and ask the RMS team to cover the position.

Cover orders are not allowed across F&O segments, since additional leverage is not provided for CO on index options.  To know more, click here .