Bracket Orders are 3 Legged orders with an Initial Leg, a Stop Loss Leg and a Target Leg. These orders use “bracketing” to determine the stop loss levels of a trade and also the target exits for a trade. This order type is available only for Intraday trades.
In a Bracket Order, a trader can place 3 orders at a time:
In case, either of the exit orders i.e. Target Order or Stop Loss Order get executed, the other pending order shall get cancelled automatically by the system.
When you place cover orders with SAMCO, the margin levied shall be [(Trade Price – Stop Loss Price) * Quantity] subject to a minimum margin.
Bracket Order is an extension to the Cover Order in the sense that you need to put a target order as well. Also, you will not be charged additional margin for the target order. In short, Bracket Order is a Cover Order with a target price. The leverage available in Cover order & Bracket Order is higher than in MIS and NRML products.
While cover orders are available for all the segments i.e. equity, currency and commodity derivatives however the margin applicable varies across segments, Bracket Orders are available in NSE EQ, NSE FO, NSE-CDS. We are the first Discount Brokers in India to offer bracket orders for commodity derivatives in the MCX segment (Available in Call & Trade Only).
For a detailed note on Bracket Orders – Please refer our Blog.