Stop-Loss Order

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We have introduced newer platforms since this post was published. Check out this user manual for Kite and Kite explainer videos here. If you trade market options sl an order to limit such a loss it is called as a Stop Loss order. So for example, if you have bought trade market options sl stock at Rs and you want to limit the loss at 95, you can place an order in the system to sell the stock as soon as the stock comes trade market options sl Such an order is called as a Stop Loss, as you are placing it to stop a loss which could be more than what you are ready to risk.

The difference between a stop loss SL and a normal order is the trigger price. In a normal order, you get to choose either limit order or market orders. In a stop loss order you choose limit or market, but with a trigger price. What a trigger price does is that it activates your order which otherwise is inactive. In the above example, when you bought the stock at Rsyou will also place a sell stop loss order with a trigger price of What this does is when the price of the stock goes to 95 or lower, a selling order is triggered.

You can choose if you want this selling order as a limit order or market order. If you choose a SL order with a selling order as market price it is called SL-M, otherwise if you have to mention the limit price it is called a normal SL order.

In this example, if you choose SL-M and keep the trigger as 95, as soon as stock goes to 95 or lower a selling order is triggered at the exchange at market price. If you choose SL, as soon as stock goes to 95 or lower, a selling order is triggered at the exchange with the limit price mentioned by you.

Please do understand that if the Stop loss order is sent as a limit price, there is no guaranteed execution of the stop loss as the limit order can also become a pending order.

See the pic below:. In Case of SL stop loss with limitwhen the stock comes to trigger price or lower a limit order is triggered at the exchange. It is trade market options sl to remember that with SL orders, because you are triggering a limit selling order there is a chance that when market is coming down fast, your selling stop loss limit order might become pending.

To avoid this risk the best bet is to trade using SL-M trade market options sl shown below. Ensure that you are careful while placing a SL-M order especially when trading bigger quantities. As it is a market order, you might have an impact cost if the instrument is not liquid lesser stocks trading. Assume you have shorted at expecting the price to come down. Your loss will happen when the price goes above and you want to stop the loss at 5 points Once a stop loss order is placed and if you want to modify it, you can go to the order book F3 and click on Modify to change the price.

Your trigger price should be below the current price for selling stop loss and above the current price for buying stop lossotherwise the stop loss will get triggered immediately. Stoploss is a product offered by the exchange. Once the SL order is placed the trigger and corresponding order is at the exchange itself. Assume Nifty puts is trading at Rs You want to buy this option only when it goes to 26, how do you do this?

Because if you put an order to buy at 26 it will get executed at the market price which is lower than In such a scenario you can use SL orders to enter a fresh position. What happens now is that only when the put option goes above 26, will your trade get executed.

Thank you for this great post. I have a querry. Dnt know what the issue is. Nithin Kamath, I have problem in placing a stop loss in zerodha, I always put stop loss to my trade but it never triggers. Can you please help me out with this. I made a huge loss due to this. Gautham, if you place SL-limit orders on scrips which are not very liquid, your SL orders can become pending when it triggers.

So if you want guaranteed execution, use SL-M. If you choose SL-M, a market order is sent when your trigger price is hit. So yes, your order will get executed at market price for sure.

Do trade market options sl the post above. I have a question on SL-M price type, Can I place the SL-M order with order entry limit price or the order entry price also will be a market order, in this case both the orders will be market orders. Please help me with this. My user id is DS Hi Nitin, Thanks for your response, but still seems not clear, I am asking when I am trade market options sl a SL-M order the order entry will be on market price or I can put the limit price in that.

Is there any way if we can control any of the entry or exit price with automated SL since I do not follow the manual SL also in expectation of trade market options sl will move into my favor. Trade market options sl you have any solution on this, please note that I can trade thru web platform only due to the firewall restrictions.

Thanks for your help Shikha Gupta. There seems to be some confusion Shikha. Now assume the maximum risk you wish to take on this position is Rs. How do you ensure this happens? Assume you specify the trigger price as and the limit price as When the stock price drops from and touches your trigger pricean order to sell Reliance is sent to the Exchange at When you place an SL-M order you only get to specify the trigger price.

Assume you specify it asthe moment the stock price hits on its way down froma market order to sell the stock gets sent to the Exchange at Market price. If the corresponding buyer at that stage is available atthen your trade gets executed at Let me one more time clear the things. I want to understand the below things, these all things are related to first order no subsequent orders. When I place a normal limit order there is nothing like trigger price or kind of automated SL.

When I place SL-L order the entry price I can put the limit price with trigger for stop loss which will be a limit order for stop loss As Nitin has already cleared that putting the SL-L order is more dangerous since there trade market options sl no guarantee for stop loss order execution when price in not moving to my stop loss price. Is that also right? Now what I was looking at that is there any way in situation 3 that I can trade market options sl the SL-M trade market options sl limit price or both the entry price will be market order price.

So do we have any solution on this from Zerodha or we will have to be with that only. May be still you are not properly understood my issue do let me know.

You can use SL order with trigger price at and limit price as Nithin Kamath, I have been trade market options sl in Kite web version since few days now. Example if current market price is and my Trigger price is 95 when the stock moves against me to below 95 which is my trigger price. I tried calling Zerodha Costumer care thrice now but not satisfied with there response.

Rajat, if you place a SL-M with trigger, it should work. Can you share a ticket number if you have, I will get someone to call you back. Let me reiterate, if market price is atyou want to sell either fresh or exit buys only if market trade market options sl to In this trade market options sl you have to place a selling SL-M order with trigger at When market goes to 95 a selling market order is sent.

If you are using a normal SL order with trigger at 95 and say limit at This order can go pending. But SL-M orders will guaranteed execute. Hi, Thank you for your time. So several times I missed the trigger point I have selected. Is this how it works? I have raised the Ticket Hope you contact me soon as possible. I request someone with sound knowledge in trade market options sl trading on kite web platform and in Trading to contact me, because each time I called, got different answers.

That is possible but there is one catch. Normally we trade market options sl to buy shares at lower price and sell at higher prices but what if after buying shares price started to go down?

So some people will buy share only when price from their CMP started to go up. They will loose little bit of money but they will be ensured that the price is moving in their direction.

Lets say price has gone upto IF you are trying to sell at a higher price than the current price, you just have to use a limit selling order. If you want to sell below the current price is when you can use SL-M with a trigger price. What about this scenario where I want to go long at a lower price than the CMP?

What is to be used if I have to go long at a price higher than the CMP? Now a sell market order will be sent and will execute at CMP. Use buy limit order to place buy orders below CMP. The buy market order will execute only when the trigger price is reached. Abhishek, SL-M is not allowed only on stock trade market options sl. I am 3quite confused about the concept.

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