Cover orders give you higher leverage by ensuring that you place a stop loss. This is beneficial only for intraday traders. Generally the cover order (CO) gives you more leverage than MIS (intraday) product type and you require 50% less margins for trading.


> What is Cover Order Product (CO) ?


A cover order is a special order type which allows traders to place both the main order as well as the stop-loss order in a single click. This can save a lot of time which is spent placing separate orders. For example if one wants to place a buy market order and the maximum loss that one is willing to take is 2% then one could use the cover order to place the market order with a 2% “built-in” stop loss.


> How much more intraday leverage do I get for trading in say, gold futures?


Here is an example: Suppose you are doing intraday trading in Gold futures. If you have Rs 40000, then you can trade 9 lots under MIS intraday product. But using cover orders, you can trade 15 lots! 


> What is main order?

The order which is placed for creating the position is called main order. The main order is always a  Market order.


> Can I place a limit main order?


No, main order is always a market order.


> Can I place Cover orders (CO) in all stocks, currencies and commodities?


No, only select stocks have been enabled for trading under the Cover Order product (C.O). Only those stocks, which meet the criteria on liquidity and volume have been enabled for trading under the Cover Order product (C.O).


For Equity Segment cover order type (CO) is available for all Stocks available in F&O segment.
For  Future segment cover order type (CO) is available for Nifty Index futures (NIFTY, CNX IT Index and Bank Nifty) and  
Nifty Index futures (NIFTY, CNX IT Index and Bank Nifty) and Stock Futures ( All Future stocks) 

For Commodity Segment cover order type (CO) is available for all commodities.


> What is the Margin requirement for Cover Order 


Equity Segment - 3% 

Futures - 3 %

Commodity Segment - SPAN/5

 

> Is it compulsory to choose a Cover "SLTP Order" while placing a Cover Order Product (CO) ?


Yes. It is mandatory to place a Cover SLTP order along with your Cover Order main order.


> What is a Cover Stop Loss order?


A Cover Stop loss order allows you to place an order which gets triggered only when the market price of the relevant security reaches or crosses a trigger price specified by the investor in the form of 'Stop Loss Trigger Price'. When a stop loss trigger price (SLTP) is specified in a limit order, the order remains passive (i.e. not eligible for execution) till the price of the stock crosses the specified SLTP. Once the last traded price of the stock reaches or surpasses the SLTP, the order becomes activated (i.e. eligible for execution at the exchange) and once triggered behaves like a normal limit order. It is used as a tool to limit the loss on a position.


Important notes regarding Cover Orders

Please note that in a buy order, the SLTP should be a price lower than the buy price i.e less than the last traded price. An SLTP cannot be placed for a price that has already been surpassed by the market when the SLTP is being placed. Similarly, in case of a stop loss sell order the SLTP should be greater than the sell price of fresh order i.e. higher than the last traded price.


> What are the details required to be given to place a main order?


Following details should be provided to place a main order.
a. Exchange
b. Stock (Symbol)
c. Quantity
d. Client Id
e. Stop Loss Trigger Price

The first 4 values would be automatically picked up from the main order details. The Stop Loss Trigger Price value is required to be entered by you which would be the trigger price and the order gets activated once the market price of the relevant security reaches or crosses this threshold price.


> Are the main orders , cover SLTP orders to be placed together?


Yes, the fresh and cover orders under Cover Order (CO) are to be placed together.


> Should the quantity of main ,cover SLTP order be the same?


Yes, the quantity needs to be the same.


> Can I cancel the cover SLTP order?


No, cover SLTP order cannot be cancelled.


> Can I modify the cover SLTP order?


Yes, you can modify the price of your cover SLTP order subject to the Trigger price conditions being fulfilled.


> What is the quantity that can be submitted for fresh orders?


The maximum quantity that can be submitted for fresh orders is the total of best 5 Bid/offer quantities that is available in the best bids and offers. If the quantity that you input is greater than the quantity available in the best 5 bids and offers then the order will not go through. Assuming that you want to place a buy order for 3000 shares @200, and the first 5 offer quantity available for the buy order are as under:


Offer Qty.

Offer Price

500

198

1000

198.50

500

198.60

500

198.70

100

199

 

In the above scenario, the first 5 Offer quantity available is 2600 and since the buy order quantity placed is 3000 which exceeds the best 5 offer quantity, it would be rejected by the system. Similar would be the case in Sell order, wherein if the total sell qty is greater that the first 5 Bid quantities available then it would be rejected. The maximum order qty to be placed should be equal to the first 5 bid/offer quantity available at that point of time.


> What will be the price at which margin for an order will be calculated?


For fresh orders the price would be calculated as the weighted average price of the best 5 bids and offers available for calculating the margin requirement. If the following offers are available in the best 5 bids and offers and the client places a Buy order for quantity of 500.


Best 5 bids

 Best 5 offers

Qty.
Price
Qty.
Price
100
5
200
11
100
5.5
200
11.5
300
8
100
12.75
0
0
100
13
0

0

0
0

 

Calculation of Buy price

Qty
Price
Value
200
11
2,200
200
11.5
2,300
100
12.75
1,275

                  

Weighted average price would be 11.55 = (5775 / 500) which would be used for calculating the margin requirement for this Cover Order (CO).


> What happens to the open position remaining at the end of the day?


In case of Cover Order (C.O), all the positions created for the day are expected to be squared off by the customers before the market closes as this is an Intra day product. In case, if the positions still remains open at the end of day, Tradeplus on best effort basis would initiate the Square off process at market price for all the open positions.


> Can I do convert order type to delivery?


No. You do not have the option of convert to delivery in Cover Order (CO).


> Where do I view my open positions?


You can view your Open positions from Admin Position (F11).


> Can Tradeplus Online disable a scrip from Cover Order (C.O ) trading during the day?


Yes, Tradeplus Online can disable a scrip from Cover Order (C.O) trading during the day.


> Can the Cover Order product be disabled?


Yes. Tradeplus Online may disable the product depending upon the market conditions.


> Can I give Shares as Margin for Cover Order?


Yes. Shares as Margin facility is available for Cover Order.


How do i sell a partially executed cover order ?


Positions can’t be exited partially and the only way to exit positions are from your Order Book (F3) by selecting the pending Stop Loss order and clicking on “Exit”.


More examples ? See our margin calculator to know the benefits of placing cover orders. Click here