Bracket order, like the name suggests, allows you to ‘bracket’ your buy or sell order on both sides by specifying a target as well as a stop-loss. If you want to buy the shares of a stock using bracket order, you can place the buy order, target sell order as well as the stop-loss sell order. (Similarly, if you want to go short on a stock, you can place the sell order, target buy order as well as the stop-loss buy order.) If you are a trader who is hard-pressed for time or a scalper who wants to make quick profits, a bracket order can help you be more systematic without needing to spend hours in front of a screen.
With Zebull’s bracket order feature, you can take new positions, square them off, and place a stop-loss all in the same window. Please note that bracket orders can currently be used only with the MCX Exchange segment, but you can look forward to this feature being rolled out to other segments in the near future.
The Segments of a Bracket Order
Bracket Order – Buy
Bracket Order – Sell
Exchange and Segment: Since bracket orders are currently available only for the MCX segment, please enter the same. Bracket orders placed for trading in equity, currency or other segments will be rejected.
Instrument: If you are trading in commodity derivatives, you’ll have to specify if your instrument belongs to futures or options.
Symbol: This, of course, requires you to mention the commodity you are going to trade with, like crude or gold.
Option Type: If you are trading in commodity options, you have to choose between a ‘call’ or a ‘put’ option, depending on your analysis and where you hope the price will go.
Expiry Date: Choose the expiry date on which your contract of choice expires. This option is active only for derivative trading.
Strike Price: This refers to the price at which the options of the underlying commodity can be exercised. Traders mostly choose the strike price based on the positioned open interest for various strike prices.
Order Type: The order type for bracket orders is always ‘limit’. With a limit order, you can specify the price at which you want to buy or sell the commodity.
Quantity: In this segment of the bracket order, you can specify the number of shares you want to buy of a commodity instrument. For derivative trading, the quantity has to be mentioned in ‘lots’.
Price: This specifies the price at which the limit order has to be executed.
Trigger Price: This is the price at which your buy or sell order will be activated and sent to the stock exchange for processing.
Disclosed Quantity: With this, you can choose to disclose only a portion of your actual quantity to the market. Only the disclosed quantity will be added to the market depth.
Validity: After you place your limit order, there is a possibility that your order won’t get matched for the price or quantity you requested. In such cases, the validity type you choose for your order determines when it gets cancelled. Opting for the ‘day’ validity type means that your order automatically gets cancelled at the end of the trading day whereas going for the ‘Immediate or Cancel’ (IOC) validity type means that your order gets cancelled as soon as it is rejected by the exchange.
LTP and ATP: You can select LTP (Last Traded Price) or ATP (Average Traded Price) based on whether the square-off order’s limit price should be calculated with respect to the Last Traded Price or the Average Traded Price of the order for each fill.
Absolute and Ticks: You can use either the absolute value (in rupees) or tick value (smallest possible price increment or decrement) to represent your target profit.
LTP, ATP, absolute and ticks have the same functionality as with the square-off order.
Trailing stop-loss: If you have a trend-following system in place and don’t want to exit a trade before trend reversal, you can trail the stop-loss and continue your profit run. This stop-loss is determined by ticks and not absolute value.
Please note that if your square-off order is triggered, your stop-loss order gets automatically cancelled and vice versa. Therefore, you can always stay insulated against the risk of wrong orders getting triggered at the wrong time.
Whether you are a scalper or trend follower, bracket order has capabilities which make your trading life easier. It gives you the flexibility to finish your trade setup in minutes, allowing you to go about your day without worrying about heavy losses or missed profits. At Zebu, we strive to make your life as a trader easy. By allowing you to place bracket orders for commodity trading, we believe that we’ve achieved a part of our goal. Happy trading!