What are bracket orders (BO) and how to use them?
Note: The exit leg of BOs have been changed from SL-M (stop-loss market) to SL (Stop Loss). Check this article out for more details.
A type of order where you can enter a new position along with a target/exit and a stop loss order. As soon as the main order is executed the system will place two more orders (profit taking and stop loss). When one of the two orders (profit taking or stop loss) gets executed, the other order will get cancelled automatically. Bracket orders are essentially algo orders.
Bracket orders can be used only for intraday trades. All bracket orders will be squared off automatically at 3:20 pm. BOs aren't allowed on BSE stocks, Bank nifty options, stock options, currency options and MCX.
Entry with Bracket orders can be done using ‘Limit orders’ and also ‘Stop loss orders’ based on triggers.
The stop loss for exit will be an SL order.
You can also use a trailing stop loss, this means that if the contract/stock moves in your direction (position becomes profitable) by a particular number of ticks, the stop-loss will go up/down based on if you are long or short, automatically.
Using trailing stop loss is optional and if you use the trailing stop loss, you’ll not be able to modify the bracket order.
1. When placing a bracket order if the order gets filled in multiple executions, each of the execution will be considered as a separate order and you will be charged brokerage & taxes separately for each partial fill. The same applies for Bracket orders squared off by our RMS team as well.
2. Both BO & CO are intraday products & will be squared off by 3:20 pm. If the markets are very volatile, BO & CO orders can be squared off at any point at the discretion of the RMS, after notifying the same to you.
3. If the entry leg of your Bracket order gets filled in multiple executions, a Target & SL order for each execution will be shown separately in the order book. Exiting any one of them will result in the exit of your entire corresponding BO position.