Confused with SL & SL M Feature Explanation

Hi, I’m new to stock market and i’ve been learning from Varsity by Zerodha app. So recently i reached the SL & SL M feature and even though i kinda understood the basics i still wasn’t happy. So i searched for the same and ended up in an article by Zerodha but this left me even more confused.

The way how i understood SL/SLM sell is used to put a limit to our loss we may incur incase the stock we own goes downwards. And SL/SLM Buy is used to buy a stock during an upward trend of the stock we wish to own. But i think the ‘Case 2’ in above mentioned article says otherwise.

Anyway i finally found a Youtube videowhere i think i kindof found the answer but the zerodha article and youtube video got me mixed up.

Idk if i’m clear enough on the topic. Sorry if not.

Thank you. :slight_smile:

The Case 2 is if you have sell (short position). You can short stocks only on intraday basis, while F&O can be shorted intraday as well as overnight. When you are short, you make profit when price decreases.

So, when you have a Short Position, you will have to place Buy SL/SLM order which will be higher than the CMP, as you will be making losses when price increases. This works totally opposite to having a long position.

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Okay now i got it. Thank you. :smiley: