What is a Bracket Order (BO) and how to place trigger based Bracket Order?

Monday, 02 March 2020

In today’s time of volatile and ever changing dynamic markets how can a trader capture the required move of a stock and at the same time manage his Risk and book profits at required levels well answer for the question is Bracket Order.

Well now you might be thinking, what is Bracket Order? What does it do? How will it benefit me? is there any leverage benefits ? Is it the right product for me? How should I use it? Let’s try to figure out those questions one by one

What is Bracket Order?

It is an intraday product/order type which provides enhanced protection and also can ensure that none of your profitable trades turns into a loss! Sounds great right now let’s see how it works

What does Bracket Order Do?

Well it’s a type of order where we can Buy/Sell any asset along with target (take profit)/exit and a stop loss, as soon as the main order is executed system will place two more orders (target and stop loss).When one of the two orders (target or stop loss) gets executed ,the other order will get cancelled automatically .

How will it benefit me?

In a situation where we won’t be available in front of the trading system to track the price movements because of any reason so in that case how will we manage ?let’s see for example a stock(let’s say X) is trading at Rs 100/- and as per our analysis done on previous day after market we have decided to buy X at 103 with stop loss at 99 and target of 110 next day , now in normal case what generally happens is we will place an SL order and wait for it to get triggered post that will place a target and a stop loss at Rs 110/- and Rs 99/- respectively once if any one of the order is triggered will be cancelling the other order, well it’s a long time consuming activity further in case if we forget to cancel the other order there might be chances of this order being  triggered  which might lead to loss .Well we won’t be needing to face this type of issue any more solution for this problem lies in Bracket Order .In Bracket Order you can place SL based Order at 103 and provide target and stop loss values post which all our manual activity is done by system like placing target stop loss and cancelling opposite order post execution of your main order. Well isn’t it time saving and effortless activity in this way we can capture the price movements without any hassle

Well is this all Bracket Order offers? No,other exciting part of Bracket Order is stop loss which is placed  can be automatically trailed(modified) as and when price  goes up in our favor all that needs to be done is to tell the system at the time of order placing and rest system will take care  ,Let’s see how it works suppose you placed order of  X at 103 while its trading at 100 and placed stop loss at 99 and mentioned that stop loss should be trailed by 1 and target is 110 so what happens next as soon as your order is executed target and stop loss will be placed at 110 and 99, next when stock moves from 103 to 104 since you have mentioned to trail stop loss by 1 system will automatically modify stop loss to 100 and to 101 when stock goes to 105 in this way by the time stock reaches 108 your stop loss is modified to 104 which is above your cost price even now if price comes down you won’t be in any loss.

Is there any leverage benefits?

Not just target, stop loss and trailing stop loss Bracket Order comes with one more added advantage since being an intraday product you can get higher leverage which is the cherry on the cake. Higher leverage is available in Equity Cash, Futures, Options, Currency and Commodities. Check out leverages here

Is it the right product for me?

Well if you are an intraday trader who wants to place stop loss, target and stop loss trailing in one go then Bracket Order is for you.


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