A cover order executes at market price(On Kite), so it does not split into multiple orders. It gets executed all at once and an SLM is then placed for this. The brokerage for a CO entry order is Rs.20(or 0.01% of traded value, whichever is lesser) and for the exit order it is Rs.20(or 0.01% of traded value, whichever is lesser).
On the other hand, the below scenario is possible for a bracket order which is a limit order and can get split into sub orders as and when quantities fill your entry order. In this case, a brokerage of Rs.20(or 0.01% of traded value, whichever is lesser) is charged for the entry BO order and a brokerage of Rs.20(or 0.01% of traded value, whichever is lesser) will be charged for each exit suborder.
It is not a wise thing to trade large quantities of equity using a bracket order as this could get split into multiple sub orders. It is ideal to trade futures and the lot size of reliance is 500, so 4 lots will be bought, either at once or can be split into a maximum of 4 orders.
Srinivas ji, appreciate your reply but above your comment, another user has posted a reply which clarifies it. Thats Mr nithin’s response.
But even a small order worth 3-4 Lacs can get executed in multiple orders. And futures lot size maybe bigger than that.
So 20 rs per executed order is not good. Due to market movement any BO/CO may get split in multiple orders which can incur high brokerage charges unnecessarily.
@nithin I hope you could save us from this. Because all these split orders have same id.
Brokerage is not charged multiple times for a BO. The design of a BO is in such a way that if you trade equity, then a BO could get split into multiple sub orders, and brokerage is charged per order id at the end of the day. The system will not know whether the order id is from an MIS order or BO order. It only knows the order id and order value and charges brokerage accordingly.
Imagine this scenario:
You place buy BO order for 1000 shares of Reliance at 950. Your target is 955 and stoploss is 945. But there is currently only a seller for 700 shares at 950. So first these 700 shares get filled and the target and exit order is placed for these 700 shares. This becomes one order id.
Let me tell you why target and exit order is placed as shares get filled. Now only 700 shares have been bought in your BO and 300 is pending. Let’s assume the system is waiting for the entire 1000 shares to complete so only 1 target and exit can be placed for the entire 1000 qty.
But before the entire qty completes, there is some bad news in Reliance and it falls 30 rupees to 920 within a split second before your SL order reaches the exchange. Now the buy order of 1000 is complete but the trading price is way below your SL price. What will you do?
Well , firstly regarding the execution part of Cover Order. Why then @nithin has said that buy order will be treated as 1 single order but since it got split into multiple orders so now each sub order is treated separately at the time of EXIT.
Secondly, regarding the stop loss trigger price miss, well then due to technical issue & high market volatility, we will have to manually EXIT the order at market price. Because the original SELL order (stop loss order) was missed. And since the Market price is way below that now so we may have to manually edit Stop loss or Exit manually?
Dear Mr. @nithin please join in & throw some light on this discussion.
CO splitting into sub orders is not possible on Kite because CO is a market order on Kite. So only 1 entry order and 1 exit order. But on Pi, CO can be used as Limit order as well. And in this case, it works just like BO. A sub order for exit will be created for each partially filled quantity and brokerage will be applicable on each SL sub order. But if you exit CO before SL is triggered, again everything will be sold out at market price. so only 1 target order. CO with Limit price will be introduced on Kite at a later date due to some design issues.
If the stock price falls way below your SL before the SL reaches the exchange, this could even lead to a negative balance in your account when you square off at this really low market price. The purpose of a BO is to place a stoploss along with the order and because of this more margin is given. But if the stoploss is not placed as and when the quantities fill, then there is no point of the BO order at all.
Mr. nithin said that the first order (Buy or short sell) will be treated as one single order & even if it gets executed in multiple orders, still it will be treated as ONE single order & max brokerage applicable will be 20 rs. only.
But since this order got executed in multiple orders, then each EXIT order (Square off at market price) will be treated separately & max brokerage 20 rs per exit order will be applicable.
Also when you square off at market price, then again your order can execute in multiple orders if market is volatile.
When you square off at market price, then your order can execute at different prices but it will all be included in 1 order Id, like any other market order.
Mr srinivas I so hope that it should be the way you are telling & only 20 rs brokerage should be applicable per order basis no matter in how many sub orders it gets executed.
But nithin has posted differently on it.
Are you still sticking to your previous comment(s) ?
Note that 1 order id can have multiple trade ids but brokerage is charged per order id.
1 market order has only 1 order id but can have multiple trade ids because even though the entire order executes at the same time, it can execute at different prices.
Also, 1 limit order has only 1 order id but can have multiple trade ids because the order can execute at different times whenever quantity is available to fill the limit price.
In CO limit order, entry limit order will have only 1 order id and if entry order gets executed at different times whenever qty is available to fill the limit order, then each partially filled order will have its own SL order(already explained why above) and each SL order will have its own order id. So brokerage will be charged per SL order id if SL is triggered. If you exit at market price before SL is triggered, then this exit market order has only 1 order id and brokerage charged only once.
In CO market order, entry market order will have only 1 order id and since the entry market order executes at the same time, it will have only 1 SL order with 1 order id. So brokerage is charged only once as there is only 1 SL order id if SL is triggered. If you exit at market price before SL is triggered, then this market order has only 1 order id and brokerage charged only once.
hi srinivas
kindly let me know is this still holds true ?
if i place market CO, n it gets executed in 5 trades with 1 order id, and SL hits, i shall be charged brokerage fr only 1 order (rs40 in total) ? (since it was a market CO and was executed in single shot)
on other hand, same scenario,if it was lmt CO, n SL hits,i shall be charged fr 5 trades (rs.120 total )?
update:
had a word with 2 zerodha executivs. … both confirmed that in cover order, you shall be charged for multiple trades and multiple order ids wl be generated (even if its MARKET CO or lmt CO), as nse treats them as seperate orders and so it wil be executed separately.
a 1000 shares market CO buy order gets executed in single shot (as its market order), bt at 5 multiple prices will generate 5 brokerages (0.01% of value or rs 20)