What is Cover order (CO)?

Cover order is a combined of this three orders we have learnt above. By placing CO order you can use all three order types in a single window. What i mean to say, you can buy (or sell) shares with keeping it as market price or limit price and can also put a stop-loss.

Let us take an example to understand it better:

Suppose you want to buy a share however you want to buy it a limit price of your choice. Currently stock is trading at Rs.80 you can place a cover order by keeping the buying price at Rs.75 and stoploss as Rs.70 .The moment stock comes to Rs.75 or lower than that your limit order will get executed & stop-loss order will be placed. In case if stock fall to Rs.70 this stop-loss order will also get executed. You can see your profit/loss in admin position.

One of the major benefit of cover order is, it reduces your risk or exposure in market. By using cover order, you are lowering your risk and ensuring that your losses are limited. Moreover you will get additional leverage or margin if you use CO order. You can place cover order only for intraday trades not for delivery based.

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