Release Date: October 21, 2024
In this release we have introduced below mentioned features on the website for Choice FinX Investors:
1. Cover Order - New order type introduced.
What is Cover Order ? How to place a Cover Order?
Cover Order
Cover Order is a 2-leg order that includes an initial Buy/Sell Limit Order followed by a Stop loss order in a single order.
FinX offers Cover Order for Intraday in Equity (NSE, BSE) & Derivatives (NSE-FO, BSE-FO).
How to place a Cover Order ?
1. Select the Intraday tab and select Cover order.
2. Enter the Price/Market Price and quantity at which you want to place the cover order.
3. Enter the Stop Loss price.
4. If required you can enter the Trailing Stop Loss, meaning if the LTP moves by Rs 5 towards up-words, then the Stop Loss will change by Rs 5.
5. Post placing the cover order, only cover order (Main Leg) will be seen in the pending tab. Once the cover order (Main Leg) is executed, then only Stop Loss order will be seen in the pending tab.
Below is the screenshot of How to place a Cover-Order from a Website?
What are the features of Cover Order ?
Cover order is a 2 leg order with Main order leg and Stop Loss order leg.
A cover order consists of either a market or limit order placed along with a mandatory stop loss order within a specified range.
Cover orders help you limit potential losses by setting predefined stop-loss levels and help you to optimize profit.
How does Cover Order work? - Example
To place a Buy Cover order -
LTP of Reliance is Rs 100, Limit Price entered is Rs 95 and Stop Loss Price entered is Rs 90.
Main Leg of Cover Order- Buy gets executed when the LTP is Rs 95 and Stop Loss Trigger Price order is pending. These orders will be seen in the orderbook.
If the LTP is Rs 90, then the Stop Loss order of Cover Order (Sell) will get executed. These orders will be seen in the orderbook.
To place a Sell Cover order -
LTP of Reliance is Rs 100, Limit Price entered is 110 and Stop Loss Trigger Price is Rs 120.
If the LTP of Reliance is Rs 110, then the Main Leg of cover order (Sell) gets executed, and stop loss order is in pending state. These orders will be seen in the orderbook.
If the LTP of Reliance moves to Rs 120, then the Stop Loss order of Cover Order (Buy) will get executed. This order will be seen in Orderbook.
What is Trailing Stop-Loss in Cover Order?
Cover Order comes with a unique feature of trailing stop loss, where you can trail your losses to minimize the losses and generate the possible returns out of every trade by setting a LTP trailing price.
How does Trailing Stop-Loss work in cover order? - Example
Case 1: For example, if you are buying a scrip ‘X’ at a limit price of ₹ 100 with a Stop loss Sell order placed at ₹ 90, and if you have set a Trailing Stop Loss of ₹ 2, then for every ₹ 2 rise in Last Traded Price (LTP), Stop loss trigger price will jump by ₹ 2, but the Stop Loss sell order will get executed at Market Price.
In the above case, if LTP becomes ₹ 102, the Stop loss sell order will jump to ₹ 92 and so on.
However, the stop loss remains unchanged if the LTP goes down in this case. The Stop loss price remains at ₹ 90 if the LTP falls below ₹ 100.
Case 2: For example, if you are selling a scrip ‘X’ at a limit price of ₹ 100 with Stop loss Buy order placed at ₹ 105, and if you have set a Trailing Stop Loss of ₹ 2, then for every ₹ 2 fall in LTP, stop loss Buy order trigger price will fall by ₹ 2.
In the above case, if LTP becomes ₹ 98, the trigger price for Stop loss Buy order will fall to ₹ 103 and so on.
However, the stop loss remains unchanged if the price goes up in this case. The Stop loss price remains at ₹ 105 if the LTP rises above ₹ 100.