When you select the Cover Order as a product type while placing an order, you will be compulsorily required to enter a stop loss for your trade. In simple terms, a cover order is a order with a stop loss. This enables us to calculate the maximum risk to your positions and accordingly charge lower margins for intraday trades. More often than not, the margin levied in cover orders shall be [(Trade Price – Stop Loss Price) * Quantity].
The leverage available in a Cover order is higher than in MIS and NRML products. Cover orders are available for all the segments i.e. equity, currency and commodity derivatives however the margin applicable varies across segments.