• The last traded price of the stock (LTP) – This gives us a sense of how much the stock is trading at the very moment.
• Percentage change – This indicates the percentage change in the LTP with respect to the previous day’s close. (View Highlight)
You can opt for a ‘Limit’ order when you are particular about the price you want to pay for a stock. In our case, the last traded price of ITC is Rs.262.25 but say we want to limit our buy price to Rs.261, twenty-five paisa lower than the LTP. In such a situation, I can use the limit feature and specify the price at which I want to buy the stock. The limit feature is great as it gives us control over the price at which we want to buy, but on the flip side, if the stock price does not fall to our limit price, i.e., 261, our order will not get executed, and we won’t get to buy. This is one of the drawbacks of a limit order. The limit order stays valid till the market closes, i.e., 3:30 PM, and then gets canceled. (View Highlight)
You can also opt for a market order when you intend to buy at market-available prices instead of a limited price. So if you were to place a market order, as long as sellers are available, your order would go through, and ITC will be bought in and around Rs.262.25. Suppose the price goes up to Rs.265 coinciding with your market order placement, then you will get ITC at Rs.265. When you place a market order, you will never be sure of the price at which you will transact, which could be quite dangerous if you are an active trader. A market order will always ensure your order goes through, unlike a limit order. (View Highlight)
A stop-loss order protects you from an adverse movement in the market after initiating a position. Suppose you buy ITC at Rs.262.25 with an expectation that ITC will hit Rs.275 shortly. But instead, what if the price of ITC starts going down? We can protect our position by defining the worst possible loss you are willing to take. For instance, in the example, let us assume you don’t want to take a loss beyond Rs.255 (View Highlight)
Note: Need to understand more on this
Select CNC for delivery trades. If you intend to buy and hold the shares for multiple days/months/years, you must ensure the shares reside in your Demat account. Selecting CNC is your way of communicating this to your broker. (View Highlight)
Select MIS if you want to trade intraday. MIS is a margin product (View Highlight)
The order book keeps track of all the orders you have sent to the exchange, and the trade book tracks all the trades. Think of it this way – when you order goods on Amazon, you first add items to the cart. The cart is the order book. You can add items, delete, or modify the order from the cart (order book). But when you press the buy button on Amazon, the order gets placed, and a receipt is generated. The trade book is that receipt. You also get a detailed receipt emailed to you called a ‘Contract Note’; we will discuss that later; for now think about the trade book as a general receipt for all the trades you carry out on the terminal. (View Highlight)
The order book provides the details of the orders you have placed. You should access the order book to:
• • Double-check the order details – quantity, price, order type, product type
• Modify the orders – For example, if you want to modify the buy order, say from 261 to 259.
• Check Status – After placing the order, you can check the status. The status would state open if the order is completed partially, it would state completed if the order has been completed, and it would state rejected if your order has been rejected. You can also see the details of the rejection in the order book. (View Highlight)
If you want to buy a share, you need to buy it from a seller. The seller will offer the shares at a price that he or she thinks is fair. The price that the seller offers you is called the ‘Offer Price.’ The offer price is highlighted in red. Let us analyze this in a bit more detail. (View Highlight)
The first offer price is Rs.3294.80. At this particular moment, this is the best price to buy the stock and there are only two shares available at this price being offered by two different sellers (both of them are selling one share each). (View Highlight)
The price that the buyer expects is called the ‘bid price.’ (View Highlight)
