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Cover Order Explained

Cover Order Explained

Cover order is a high leverage feature for intra-day traders to take advantage of high margin trading exposure with safe and controlled risk. Cover order is a set of two orders placed simultaneously. Cover order is currently enabled for NSE Cash, NSE FNO and NSE Currency segments.

  1. 1st leg – Market Order
  2. 2nd leg – Stop Loss trigger pending order (Market Order)

In case of Cover Order first order is always a Market Order and its corresponding 2nd leg Stop loss trigger pending order also placed simultaneously and sits in the order book. And the stop loss order is compulsory. Once the price touches the stop loss trigger price, 2nd leg order will be executed as market order.


Cover 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 run. Cover Orders enable traders to maintain their trading discipline. Traders can take advantage of the margin benefits as well, using the Cover Order facility to leverage their positions greatly while enjoying the benefits of a stop loss to protect them from any potential downside risk.

Cover order provides increased leverage compared to MIS orders. You get upto 20 times for equity, and upto 7 times for F&O. Cover Orders are designed only for Intraday

How the Margin Required for Cover Order is calculated

Margin Requirement depends upon three factors.

  1. Current Market Price
  2. Stop Loss Size
  3. Trading Lot Size

Generally margin comes around at 1.5% of the contract value.Let's say Nifty is at 7800 then the one contract value = 7800x75 = Rs5,85,000.

Hence you require a margin range between Rs.8,775. As long as your stop-loss is less than 117 points in Nifty Future you require a minimum margin of Rs.8,775/-.

Supported Platform

Cover orders are currently available in the following platforms.

  1. Nest Trading Terminal (Desktop)

Cover orders can be placed only during regular market hours and cannot be placed during the pre-market trades.

How to Place the Cover Order

To Place Buy Cover Order Entry press Shift + F1 (Nest Terminal)

To Place Sell Cover Order Entry press Shift + F2 (Nest Terminal)

Or right click on the scrip to select Cover Order Entry (Nest Terminal)



Remember that all the Cover orders will be squared off automatically by 3.15p.m in case of NSE Equity, NSE FNO trading segments.



Once the Cover order gets executed, positions can’t be exited partially and the only way to exit positions from your Order Book (F3) is by selecting the pending Stop Loss order and clicking on “Exit”.


  1. It would be great if you can explain with an example for both buy and sell cover order – with a focus on managing risk

    • Suppose Nifty is trading at Rs. 9800

      Long Cover Order: You decide to go long since you’re bullish on the market (Benefit from upward movement in prices) and place a market order to buy at Rs 9800 and also place a stop-loss sell order at Rs.8975 to protect yourself from any unexpected downward movement in prices.

      Short Cover Order: You decide to go short since you’re bearish on the market (Benefit from downward movement in prices) and place a market order to sell at Rs 9800 and also place a stop-loss buy order at Rs.9825 to protect yourself from any unexpected upward movement in prices.

      A stop loss order is placed as a pending order which gets converts to a market order on breach of the specified price.

      Scenarios for Long & Put

      Scenario 1: You square off the order by placing a (market sell for long) / (market buy for short) order once the prices reaches your desired target.

      Scenario 2: If the order is not squared off by you then the order is automatically squared off at the end of the day based on the last traded price irrespective of profit or loss.

      Scenario 3: The Order get automatically squared off on breach of the stop loss price.

  2. Can i modify 2 leg & 3 leg orders in cover & bracket order. Pls clarify.

    • Cover Order is a 2 leg Order & Bracket Order is a 3 leg order. And Yes you can modify all legs of an order.

  3. can i use cover order for curency future and option ???

    • Yes you can use Cover Order for Currency Future and Option, In fact you can you use for any segment and any script.


    • Yes, you will be able to do it from a single screen. In order to do so, please visit order book (F3) and click F6 for snap quote.


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