Zerodha Order Types

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When placing an order in Zerodha, you come across options like a market order, limit order, and iceberg. Thinking, what are they? Well, they are Zerodha order types that help you in customizing your order with respect to price, size, setting entry and exit prices, etc.

In this article, we are going to discuss all the order types of Zerodha in detail.

What are Different Order Types in Zerodha?

Now order types are different orders that help you set your entry and exit prices during the trade.

So, to enter a specific position for the long or short term there are two different order types:

  • Market Order
  • Limit Order

Other than this to exit the trade if the stock price moves in the direction opposite to what is predicted, you are provided with three different options:

Apart from this, there are some advanced order types like:

  • After Market Order
  • Iceberg Order
  • Basket Order

All these order types make a trader’s journey smooth and help them to take and exit their position at the right time.

Let’s learn in detail about these Zerodha order types.

Market Order in Zerodha

Market order, this is the order type that helps you in placing a trade at the current market price. To understand this, consider a shopping mall, where you buy things at the MRP.

So, if the share price of XYZ company is ₹304.50 and you place a buy order of 100 shares, then the order will be executed right away at the market value.

To place the market order, click on Market on the Order Window Screen.


Limit Order in Zerodha

A limit order allows you to trade at the price at which you want to buy or sell shares. This can relate to shopping in the local market, where you negotiate and buy a product at the best price.

In the share market, although no actual negotiation takes place here you can enter the value at which you are willing to buy.

For example, XYZ shares are trading at ₹304.50 but you want to buy 100 shares at ₹300 each. In this case, you can choose to enter the limit order in Zerodha.

On confirming the order, the details are transferred to the exchange where on price matching the trade gets executed.


Zerodha Stop Loss Order

Now comes the stop loss order that helps you exit your long and short position at the best value if the share price goes in the direction opposite to what you have predicted.

In the case of a long position, the stop loss value is kept less than the buy price on the other hand, in the case of a short position where you assume the market to go down, the stop loss trigger value is kept higher.

In Zerodha Kite, there are two options SL and SLM. Let’s first understand SL i.e. Stop Loss order.

Here you can enter the range of prices i.e. Stop Loss value and trigger value. The trade is executed in between the specified range.

Let’s understand how to place stop loss order in Zerodha Kite with an example. Suppose you buy a share at ₹300 for intraday trading and want to minimize the loss and thus choose an SL order.

As per the definition, you need to enter the SL price and trigger price. For a long position, the trigger price little higher than the stop loss value, and thus the value you entered is:

Trigger Price= ₹297
SL Value= ₹296

Now the sell order of ₹296 will be sent to the exchange as soon as the price hits ₹297 and the order gets executed between ₹297-₹296.

Similarly in the short position, where you sell shares at ₹300, the trigger price would be kept lesser than SL. So here the order would be entered as:

Trigger Price= ₹303
SL Price= ₹304.

The order will be thus triggered at ₹303 and executed in between the range.


SLM in Zerodha 

Sometimes, when you just want to exit your position at the earliest to avoid losses in the trade, you can choose the SLM order type in Zerodha where you just need to enter the stop loss value.

So in the above example where you entered trigger price+stop loss value, here you just need to enter the stop loss.

The order gets executed as soon as the share value hits the stop loss value.


Cover Order in Zerodha

The above stop loss orders are available for both intraday and long-term trades and can be canceled or modified, but if you want to place a two-legged order for intraday trades then you can choose for cover order in Zerodha.

It is used to mitigate the risk of high volatility and loss during intraday trading.

Cover order includes adding a stop loss value along with the market or limit order. Since you are using a stop loss order using the cover order option, you cannot cancel the stop loss order once the buy or sell order is executed.

Also, you cannot use cover orders to place intraday trades in BSE and F&O segments.

To place a cover order in Zerodha, follow the steps below:

  • Open Zerodha Kite App, and choose the share for intraday trade.
  • Add the share to the watchlist.
  • Now click on Buy or Sell share.
  • On the order, window click on Cover Order.
  • Enter the limit or market value to take a long or short position.
  • Now enter the stop loss value and swipe the button to place the order.
  • Once the order gets executed, the stop loss order gets activated and executed accordingly.

AMO Order in Zerodha

The next on the list is the AMO order that allows a trader to place a trade after market hours, however, the trade is executed on another trading day after 9:07 AM.

This generally helps a trader to take an early position in the market or to close any open position. 

  • You can place an AMO order between 03:45 PM-09:07 AM using the Kite app.
  • Just select the share in which you want to place an AMO order.
  • Enter the details and swipe the button to confirm your order.
  • The order details will be sent to the exchange and will be executed after price matching on another trading day.

Zerodha Iceberg Order

We discussed limit orders and market orders, but whatever order we place not the whole order is executed at the same value. For example, if you placed a market order at ₹304.50 to buy 100 shares then the trade might be placed at a little difference, for example, ₹304.75 or 304.20, etc.

This increase the overall impact cost and hence your profit percentage. However, with the Zerodha iceberg order, you can actually choose to break your order in multiple legs. This allows you to buy or sell a share at the best price but here the Zerodha brokerage charges are levied on the basis of the number of legs in the order.

  • To place an iceberg order in Zerodha, follow the steps below:
  • Log in to the app.
  • Add the scrip and click on the buy or sell button.
  • Now click on Iceberg option.
  • Enter order details and confirm.

Basket Order in Zerodha

Last comes another advance order type, basket order. This order type is available under Tools where you can actually make multiple trades i.e. take and exit multiple positions by placing a single trade.

This is something like a cart where you add all the items and get them billed simultaneously. This helps a trader to save time and to make an entry or exit at the best price.

In future options trading, this order type helps a trader in reducing margin requirements as well.

To place a basket order in Zerodha, here are the steps you need to follow:

  • Log in to the app.
  • Click on Tools on the bottom menu bar.
  • Now click on the basket and then on the option Create new basket.
  • Add scrips you want to buy or sell.
  • Fill in the order details and confirm.

Conclusion

Above is the detail of all the order types in Zerodha that offers a smooth experience to the trader while using the Kite app or the web. You can choose the one as per your trading style and maximize the chance to earn profit in the market.

Also, the smooth UI of the app makes it easier for the beginner to place any of the above orders in a few clicks.


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