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Why are market orders blocked for trade to trade and debt category instruments?

Market orders are blocked for trade-to-trade and debt-category instruments due to their illiquid nature. A lack of liquidity means that the bid and ask spread in the instrument is very high and can have an immediate adverse effect on the client's P&L. The bid/ask price could be at a price far from the last traded price or theoretical price of the contracts. However, a limit order can be used as a market order to execute this transaction safely. To learn how to use a limit order like a market order, see How to use limit orders as market orders?

Did you know? Market orders for all non-EQ category instruments are blocked. To learn more about different categories, see What do the different groups on NSE and BSE mean?