Today, we’re really going to dive into this wonderful world of order types. Think of these as your trading tools – each designed for some specific purpose. Master these, and you’ll be placing orders like a pro in no time!

NSE listed Order Types: Beyond the Basic “Buy” and “Sell”

Of course, you get it—buy low, sell high. The NSE, however, provides an entire menu of order types to finesse up your trading game. So, let’s break ’em down:

1. Market Order: Your Need-for-Speed Option

Want to sell or buy shares now? Your friend is the market order. It’s like hailing the first cab on a busy street, whereby you are guaranteed a ride; although the price might turn out to be a little more than you would have expected, or less in case of selling.

Use it when: You want your order executed instantly, regardless of price fluctuations.

Example: You see how Reliance Industries is surging, and you want to get onto the rocket as quickly as possible. Place a market order, and kaboom, you become a proud shareholder!

2. Limit Order: Like A Boss, Setting Your Price

Hate-Surprises?
Limit Order is your Jam: You set your Desirable Price or Better, and the order executes only when the market hits your target. It is like ordering online—you know what you pay for; no nasty hidden charges!

Use it when: You are patient and want to buy or sell at a specific price point.

Example: You want to buy Infosys for ₹1,500 per share. Place a limit order in that price, and the order gets executed only if the stock, when Infosys comes down to your target.

3. Stop Loss Order: Your Safety Net in the Jungle of Markets

It can be a wild ride in the share market! Protect your profits and your sanity by just placing a stop-loss order. It triggers an automatic market order on your brokerage platform when the stock hits your predetermined stop price. Think of it as your emergency brake, which minimizes potential losses.

Use it when: You want to limit downside risk, especially in volatile markets.

Example: You bought Tata Motors at ₹600, and you would be happy if you made a 10% profit. Put a stop loss order of ₹540 (which is 10% below your bought price). If the stock then decides to take a dive, the stop loss will be triggered and sell your shares for you so that you preserve those hard-earned gains.

4. Stop Loss Limit Order: Getting the Best of Both Worlds

This order type marries the safety of a stop loss with price control like you get with a limit order. You set both a stop price, which triggers the order, and a limit price which is your minimum acceptable selling price.

Use it when: You want to limit your losses but also want to make sure you sell at a price you’re comfortable with.

Example: You hold HDFC Bank shares bought at ₹1600. You can place a stop loss limit order with the stop price at ₹1550 and the limit price at ₹1560. When the price falls to ₹1550, a limit order at ₹1560 shall be placed so that you will not sell below that price even if the market falls further.

5. More than the Basics: Other Types of Orders

It has even more specialized order types, including the following:

• After Market Orders (AMO): Place orders after market hours and get them executed when the market opens the next day.
  Good-Til-Cancelled Orders: Your order active till executed or cancelled by you.
• Immediate or Cancel Orders: Execute immediately, or get cancelled, partial fills are possible.

Parasram’s Pro Tip: Back test these order types on paper or through virtual trading platforms before stepping into the ring. It’s kinda like test-driving a car for your trading strategy!