Stock Market Order Types — Complete Guide
Market, limit, stop-loss, GTT, AMO, CNC vs MIS, T+1 settlement, and circuit limits explained with examples.
Stock Market Order Types — Every Order Explained
You've opened your demat account and found a stock to buy. But the app shows 6 different order types. Market? Limit? Stop-loss? GTT? Choosing wrong can cost you money. Let's understand each one with real examples.
Market Order
Infosys is trading at ₹1,850. Arjun places a market buy order for 10 shares.
- Expected cost: ₹18,500
- Actual execution: ₹1,852 (price moved in the instant between clicking and execution)
- Actual cost: ₹18,520
The ₹20 difference is called slippage. For liquid stocks like Infosys, slippage is minimal. For small-cap stocks, it can be significant.
Use market orders for large-cap, highly liquid stocks where price impact is minimal. Avoid for illiquid small-caps or during volatile periods (budget day, election results).
Limit Order
TCS is trading at ₹4,200. Priya thinks it's slightly overvalued. She places a limit buy order at ₹4,150 for 5 shares.
Scenario A: TCS dips to ₹4,150 during the day → order executes at ₹4,150 or lower. She saves ₹250+. Scenario B: TCS never goes below ₹4,180 → order expires unfilled at 3:30 PM.
Limit orders give price control but risk missing the trade entirely.
Stop-Loss Order
| Type | How It Works | Risk |
|---|---|---|
| SL-M (Stop-Loss Market) | Trigger hit → market order executes immediately | Slippage in volatile markets |
| SL (Stop-Loss Limit) | Trigger hit → limit order placed at your price | May not execute if price gaps through |
Ramesh bought Tata Motors at ₹800. He sets a stop-loss:
- Trigger price: ₹760
- Limit price: ₹755 (for SL order)
If Tata Motors falls to ₹760, the stop-loss activates and sells at ₹755-760. Maximum loss: ₹45 per share (5.6%) instead of riding it down to ₹600.
Without stop-loss: Could lose ₹200/share (25%) With stop-loss: Loss capped at ₹45/share (5.6%)
If a stock opens 10% lower due to bad news (gap down), your stop-loss at 5% below may execute at 10% below. Stop-losses reduce risk but don't guarantee exact exit prices.
GTT Order (Good Till Triggered)
HDFC Bank trades at ₹1,700. Anita wants to buy if it drops to ₹1,550 (at support level). She sets a GTT buy order:
- Trigger: ₹1,550
- Limit: ₹1,555
- Valid for: 1 year
She doesn't need to watch the market daily. If HDFC Bank hits ₹1,550 anytime in the next year, her order executes automatically.
AMO (After Market Order)
Bracket Order
A bracket order is three orders bundled together — entry + target + stop-loss. All three are placed simultaneously.
Reliance trades at ₹2,900. Suresh expects a move.
- Buy at: ₹2,900 (entry)
- Target: ₹2,970 (exit with profit)
- Stop-loss: ₹2,860 (exit with limited loss)
If Reliance hits ₹2,970, target order executes and stop-loss cancels. If it hits ₹2,860 first, stop-loss executes and target cancels. One always cancels the other — this is called OCO (One Cancels Other).
CNC vs MIS — Settlement Types
| Feature | CNC (Cash and Carry) | MIS (Margin Intraday Settlement) |
|---|---|---|
| Purpose | Delivery — hold shares long-term | Intraday — buy and sell same day |
| Holding Period | Unlimited | Must square off by 3:15 PM |
| Margin Required | 100% of trade value | 20-40% (leverage provided) |
| Brokerage | ₹0 (most discount brokers) | ₹20 per order |
| Risk | Only stock price risk | Amplified losses due to leverage |
| Best For | Investors | Active traders |
SEBI data shows 90% of intraday traders lose money. MIS/intraday trading with leverage can wipe out your capital quickly. Beginners should strictly use CNC (delivery) orders.
T+1 Settlement
Circuit Limits
Nifty 50 and Sensex have market-wide circuit breakers at 10%, 15%, and 20% movement from previous close.
Key Takeaways
- Market orders give instant execution but no price control
- Limit orders give price control but may not execute
- Always use stop-loss orders to protect against large losses
- GTT orders stay active for up to 1 year — set and forget
- Use CNC for delivery (investing), MIS for intraday (trading)
- 90% of intraday traders lose money — stick to delivery as a beginner
- India follows T+1 settlement — shares credited next business day
Priya wants to buy a stock only if it drops to ₹500 from current ₹550, and she doesn't want to monitor daily. Which order type should she use?
Continue learning at our Stock Market Learning Center.
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