Bracket order is an innovative feature for day traders to take advantage of high margin exposure with safe and controlled risk. Bracket order is a set of three orders placed simultaneously. Bracket order is currently enabled for NSE Cash, NSE FNO, NSE Currency segments.
1st leg – Limit Order
2nd leg – Take Profit Limit Order
3rd leg – Stop Loss Order
Once the Limit order gets triggered both ‘Take Profit’ and ‘Stop Loss order’ get activated. Now if the price hits the target price then ‘take profit limit order’ gets executed and the stop loss order gets cancelled automatically. Similarly when the stop-loss hits automatically the take profit order gets cancelled.
Bracket orders can be used to execute trades with better risk-reward ratio, where you want to limit your potential trading losses and allow the profits to be executed with a pre-defined risk reward ratio. Bracket order also comes with trailing stop-loss functionality which automatically trails your stop loss with regard to current market price and provides a better protective mechanism.
How the Margin Required for Bracket Order is calculated
Margin Requirement depends upon three factors
- Current Market Price
- Stop Loss Price
- Trading Quantity
Generally margin comes around 1.5%-2.5% of the contract value.Let’s say Nifty is at 7800,then one contract value will be = 7800×75 = Rs5,85,000
Hence you require a margin range between Rs.8,775 – 14,625. As long as your stop-loss is less than 117 points in Nifty Future you require a minimum margin of Rs.8,775/-. If you want to place a stop loss of 125 points then margin required will be 125×75 = Rs.9,375/-
Bracket orders are currently available in the following platforms
1. Nest Trading Terminal (Desktop)
Bracket orders can be placed only during regular market hours and cannot be placed during the pre-market trades.
How to Place the Bracket Order
To Place Buy Bracket Order Entry press Shift + F3
To Place Sell Bracket Order Entry press Shift + F4
There are two ways you can set your target and stop-loss using bracket order. One way is using absolute values as stop loss where in above figure you can see the absolute needs to be checked followed by filling the stop-loss points from limit order price. Alternatively you can also use ticks where 1 Tick = 0.05 points so 300 ticks represents 0.05×300 = 15points in Nifty futures.
Remember that all the bracket orders will be squared off automatically by 3.15p.m for NSE Equity & NSE FNO and 4.45p.m for NSE Currency.