i had used bracket order for trading in NIFTY OPTIONS…i had endup in paying higher brockerage;for e.g… i had placed an order of ten lots in nifty options under bracket order sometimes its executed as ten lots together r else it will get split up automatically into many orders as such two lots plus three lots and five lots…so which utimately ended me up into paying three times of brokerage
Now that you have realized the trap, please do not commit the same mistake again.
Yes, especially for options, the transaction value for the calculation of brokerage is [(Strike Price + Premium) * Quantity]. For Nifty and Banknifty, the insertion of strike prices for the calculation of transaction value will always ensure that the brokerage is Rs.20 for every option trade as the transaction value will always be above Rs.2 lacs.
A Bracket Order will always get executed as and when quantity is available to match your order. So it can even undergo partial execution several times before being completely executed, If you have placed a Buy order for 10 lots in Options, and if a Seller is ready to sell 2 lots at your Bid price, then 2 lots out of your 10 lots will be executed first.
This same scenario of partial execution can happen with a MIS or NRML order as well but the remaining quantity will be open under the same order ID and brokerage will be charged only for 1 order. The tradeoff for this facility is that more margin is that full cash is required to buy Nifty and Banknifty options in MIS and NRML.
Don’t you think something needs to be done for avoiding this at broker’s end ? @BharatW
Hi trader, bracket order’s brokerage is different. It charges more than the promised 20 rupees as it totally depends on how many orders it takes to fill your single order. I suggest you should use cover order. Cover orders will not charge more than 20 rupees no matter how many lots you trade.
So the same thing applies in equity as well ?
But co won’t guarantee the price at which they execute…just a point to be aware of
How many orders are placed or ur trade book?
No of trades thru which the order gets filled doesn’t. Matter
You are only billed for the orders executed, irrespective of the no of trades in which the orders were executed.