What is Cover order?

What is Cover order?

A Cover Order is intraday order which is followed by a mandatory Stop Loss Order. Hence, two orders can be placed at one time. This helps traders minimize their losses by protecting themselves from unexpected market fluctuations. A Cover Order can be placed either as a Market order, when the order executes at the current price or as a Limit Order, when the price of the share hits the desired entry price. The stop-loss order cannot be cancelled.   

Please follow the process/video below while placing a cover order:

      


  
             


Question 1: What is a Cover Order and why is the stop loss necessary?
Answer: A Cover Order is a type of order where a stop loss is set along with the regular trade. The stop loss ensures that if the price moves unfavorably, the system automatically squares off your position at the specified stop loss level, minimizing potential losses.

Question 2: Can I modify or cancel my order after placing it?
Answer: Orders can generally be modified or canceled before they are executed. Check the 'Order Book' for options related to modifying or canceling orders.

Question 3: What happens if my trade hits the stop loss?
Answer: If your trade reaches the stop loss price, the system will automatically square off the position, ensuring that the trade is closed at the stop loss level to limit further losses.