Order types at a glance
| Order | You set | How it fills | Main risk |
|---|---|---|---|
| Market | Quantity | At once, at the best prices available | Slippage in thin contracts |
| Limit | Quantity and price | At your price or better | May not fill |
| Stop-loss limit (SL) | Trigger and limit price | Becomes a limit order at the trigger | May not fill in a fast move |
| Stop-loss market (SL-M) | Trigger price | Becomes a market order at the trigger | Slippage; not allowed in options |
| Iceberg | Total quantity and number of legs | In slices, one leg at a time | Slower to complete |
| After market order (AMO) | Any of the above, outside market hours | Sent when the market opens | The opening price can gap |
| GTT | Trigger, valid for up to a year | Broker places an order when triggered | May not fill once triggered |
The first four are exchange order types. Iceberg orders, AMOs and GTTs are facilities your broker builds on top of them, so their details vary by broker.
How the order book works
Every contract on NSE has an order book, with buyers' bids on one side and sellers' asks on the other. The best bid is the highest price a buyer will pay, and the best ask is the lowest price a seller will accept. The gap between them is the spread.
When an order arrives, the exchange matches it against the best prices on the other side, first by price and then by time. An order that cannot be matched waits in the book until it fills, is changed or is cancelled.
Market orders
A market order buys or sells at once at the best prices available. You choose the quantity and the market chooses the price.
In a liquid contract the difference is small. If 650 units, or 10 lots, are on offer at ₹280.50, a market buy for 10 lots fills there. In a thin contract, a market order takes whatever sits in the book. If a stock option shows 500 units at ₹12.00 and the next seller at ₹14.50, a market buy for 1,000 units pays an average of ₹13.25, about 10% above the best price.
Gaps like this cause freak trades, where an order fills far from the last traded price. To limit them, many brokers:
- block market orders in stock options and in illiquid index option strikes,
- apply market protection, which turns a market order into a limit order a set percentage away from the last price,
- reject market orders sent through their API without a market protection value, as Zerodha does, and
- refuse market orders for some contracts when they are placed as after market orders.
Use market orders only in liquid contracts, and check the depth before you send a large one. Our slippage calculator estimates the cost.
Limit orders
A limit order sets the worst price you will accept. A buy limit at ₹279 fills at ₹279 or lower, and a sell limit at ₹281 fills at ₹281 or higher. If the market never reaches your price, the order stays open until the close and is then cancelled.
A limit order priced across the spread, such as a buy limit at ₹281 when the ask is ₹280.50, fills at once like a market order but cannot fill above ₹281. Algos use these marketable limit orders for entries and exits because they cap slippage.
Order validity
- Day: the order stays open until it fills or the market closes.
- IOC (immediate or cancel): whatever can fill at once fills, and the rest is cancelled. Use it when you want a quick fill without a leftover open order.
Stop-loss orders: SL and SL-M
A stop-loss order waits for the price to reach a trigger, then sends an order to the exchange. It exits a position automatically when the market moves against you.
Stop-loss limit (SL)
You set two prices: the trigger, which activates the order, and the limit, which is the worst price you will accept once it is active.
The gap between trigger and limit is your buffer. If it is too small, a fast fall can jump past the limit and leave the order unfilled while the loss grows. If it is too large, you may fill at a worse price than planned.
For a short position, the order works the other way: a buy SL with the trigger above the current price and the limit above the trigger.
- Sell SL: trigger below the last traded price, limit at or below the trigger.
- Buy SL: trigger above the last traded price, limit at or above the trigger.
A trigger on the wrong side of the market makes the order trigger at once or get rejected.
Stop-loss market (SL-M)
An SL-M order sends a market order when the trigger is hit. It fills, but at whatever price the book offers.
NSE discontinued SL-M orders in index and stock options from 27 September 2021, after a series of freak trades (circular NSE/FAOP/49677). In options, use an SL order with a wider buffer instead. Most brokers still accept SL-M orders in futures and equity.
Iceberg orders
An iceberg order splits a large order into smaller legs and sends them one at a time, so the full size never shows in the order book.
There are two reasons to use one:
- Freeze quantity: the exchange sets a maximum quantity per order for each F&O contract and rejects larger orders. Freeze limits are revised from time to time, often along with lot sizes, so check NSE's current list.
- Market impact: a large order shown all at once can push the price against you. Smaller legs give the book time to refill.
QuantPower supports iceberg orders for large trades.
After market orders (AMO)
An after market order is placed while the market is closed. Your broker holds it and sends it to the exchange when the market next opens for that segment. AMO windows differ by broker, and most accept orders in the evening and early morning.
AMOs suit orders planned in advance, such as buying a stock at a set price the next day. Take care with options: the opening price can be far from the previous close, so use a limit price. Some brokers do not accept market AMOs in options at all.
GTT and other broker orders
Some order types exist only at the broker. The broker stores your instruction and sends a normal order to the exchange when a condition is met.
- GTT (good till triggered): waits for a trigger price for up to a year, depending on the broker, then places a limit order. An OCO version holds a target and a stop loss together; when one triggers, the other is cancelled.
- Cover order: an intraday order sent with a compulsory stop loss.
- Bracket order: an intraday order with a target and a stop loss attached. Several brokers have withdrawn bracket orders, so check what yours offers.
Because these instructions sit with the broker, they can fail to trigger if the broker's system has a problem, and they do not fill if the price gaps past the limit.
Product types: intraday, carry forward and delivery
Every order also has a product type, which tells the broker how long you plan to hold the position.
| Product | Common name | Used for | At the close |
|---|---|---|---|
| Intraday | MIS | Positions opened and closed the same day | The broker squares off open positions |
| Carry forward | NRML | F&O positions held overnight | The position carries to the next day |
| Delivery | CNC | Buying shares to hold | Shares move to your demat account |
Names differ by broker. Brokers square off intraday positions still open near the close at the market price, often with a charge.
How algos use order types
An algo cannot look at the screen and decide how to fill, so order types are part of its rules.
- Entries: marketable limit orders, priced a few ticks through the best price, fill quickly and cap slippage. Market orders work in liquid contracts when your broker applies market protection.
- Stop losses: SL orders with a buffer, placed as soon as the entry fills. Some platforms track prices themselves and send an exit order at a set level. QuantPower's MTM stop loss exits when the combined profit or loss of your positions reaches your limit.
- Multi-leg strategies: buy the hedge legs first, then sell the short legs. Your broker then sees a hedged position and blocks less margin.
- Large orders: iceberg orders keep each leg below the freeze quantity.
- Order rate: SEBI's framework lets your own algo run without registration if it sends fewer than 10 orders a second. See SEBI's algo trading rules.
Example: a short straddle with stop losses
This uses the model prices from our other Nifty examples: Nifty at 25,000, 12 days to expiry, IV of 14% and a lot of 65.
| Leg | Order type | Trigger | Limit | Purpose |
|---|---|---|---|---|
| Sell 25,000 CE | Limit | — | ₹280.50 | Entry |
| Sell 25,000 PE | Limit | — | ₹227.10 | Entry |
| Buy 25,000 CE | SL | ₹364.65 | ₹370.00 | Stop loss, 30% above entry |
| Buy 25,000 PE | SL | ₹295.25 | ₹300.00 | Stop loss, 30% above entry |
The straddle collects ₹507.60 per unit, or ₹32,994 per lot. If the call's stop triggers and fills at ₹364.65, that leg loses ₹5,469.75. If it fills at its limit of ₹370, the leg loses ₹5,817.50. The difference is the cost of the buffer. Our short straddle guide covers the full strategy.
Order status
| Status | Meaning |
|---|---|
| Open | The order is in the exchange's book, waiting to fill |
| Trigger pending | A stop-loss order is waiting for its trigger |
| Partially filled | Part of the quantity has traded and the rest is open |
| Complete | The full quantity has traded |
| Cancelled | You, your algo or the exchange cancelled the order |
| Rejected | The broker or the exchange refused the order |
Every rejection comes with a reason. Our troubleshooting guide explains the common ones, from insufficient margin to quantities above the freeze limit.
Related guides
- Trailing stop loss: a stop that follows the price
- Iceberg orders: splitting large orders below the freeze quantity
- Order book dynamics: how bids, asks and depth change
- Live trading terminal: orders and positions on one screen
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Frequently asked questions
What is the difference between SL and SL-M orders?
Both wait for a trigger price. An SL order then becomes a limit order and fills only at your limit or better. An SL-M order becomes a market order and fills at the best available price.
Why can't I place an SL-M order in options?
NSE stopped accepting SL-M orders in index and stock options from 27 September 2021, after freak trades in illiquid contracts. Use an SL order with a buffer between the trigger and the limit.
Can I place a market order in options?
Usually yes in liquid index options. Many brokers block market orders in stock options and illiquid strikes, and some apply market protection, which Zerodha requires on market orders sent through its API. A limit order priced through the best bid or ask fills just as quickly and caps the price.
When is an AMO executed?
Your broker sends it when the market opens for that segment, and it fills like any other order at that time. A limit price protects you from an opening gap.
What is freeze quantity?
The maximum quantity the exchange accepts in a single order for an F&O contract. Larger orders are rejected and have to be split, which an iceberg order does for you.
Which order type is best for algo trading?
For most options strategies, marketable limit orders for entries and exits, and SL orders for stop losses. They fill quickly while capping the price.
Sources
- SEBI, circular on safer participation of retail investors in algorithmic trading, 4 February 2025, and glide-path circular, 30 September 2025 (sebi.gov.in)
- NSE, equity derivatives contract specifications, lot sizes and freeze quantities (nseindia.com)
- NSE, circular NSE/FAOP/49677, 21 September 2021, discontinuing stop-loss market orders in options from 27 September 2021 (checked 20 October 2026)
- Kite Connect forum, "Preparing to comply with SEBI's retail algo rules (Static IP, ratelimits, order types)", on market protection (kite.trade), checked 20 October 2026