What are cover orders and how to use them?
In a Cover Order - the buy/sell order is either market order or a limit order which is accompanied by a compulsory Stop Loss order, in a specified range. This Stop Loss Order cannot be cancelled.
Since the Stop Loss Order is being placed simultaneously while getting into the contract, the risk that is being taken automatically reduces. Because the risk reduces, the margin requirement also automatically reduces and thus higher leverage is provided.Check the margin calculator to check margin requirements.
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 by 3 pm after notifying the same to you.
COs aren't allowed on BSE stocks, Bank nifty options, stock options and currency options.