I bought Voltas futures for 263 and kept stoploss for 261.5 but stoploss was executed at 261.2. Why stoploss was not executed at 261.5 ?
did you choose stop loss market with trigger price of 261.5 ? if that is the case, when the price reach 261.5, a market order is generated to sell. if the price is fast declining, you may be getting a price lower than the trigger price. In case you want to sell at 261.5 it self, you may need to place a stop loss limit .
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I’m assuming you’ve placed a SL-M order with trigger price a 261.5.
To explain the SL-M order in plain English, you’re basically telling the exchange to sell Voltas futures at market price when the price of Voltas drops to 261.5.
In your scenario, when the price of Voltas dropped from 263 --> 261.5 and hit your trigger price, your market order to sell (which was pending to be sent) got activated and got sent to the exchange and the corresponding buyer was available at Rs.261.20 only which is why it got executed at that rate.
If you want the order to get executed at a specific price, you’d have to place the SL order, where you’ll have to mention the Trigger price as 261.5 and the limit price also as 261.5. However in case its an illiquid contract, your SL order will remain pending in the system (in case it touches 261.5 and there is no corresponding buyer at 261.5).
More is explained here: http://zerodha.com/z-connect/tradezerodha/zerodha-trader-software-version/stop-loss-orders-limit-market
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Stop Loss - Market (SL-M) orders have only trigger price, no limit price.
Stop Loss - Limit (SL-L) orders have one trigger price and one limit price.
You are creating normal Limit orders and Market orders in usual way, The same is happening in STOP LOSS orders, except instead of you sitting and giving the order, the system places the LIMIT order and MARKET order for you (exactly when your trigger price is reached).
If you had set the trigger price as 261.5, it is same as you watching the monitor and when LTP (last traded price) is at 261.5, you are placing a normal MARKET/LIMIT order.
If you place SL-M order when price is 261.5, your trade may end up in 261.2, this is normal behavior, since 261.2 is next available market offer and you had placed a market order.
If you want to safeguard your stop loss and avoid selling below 261.5, then you should select Sl-Limit order and set the Price as 261.5 (which is limit price, below which your order will not execute), and set the trigger price as some value little higher than 261.5, say for example 261.7
Now when 261.7 is reached in your screen, your limit order for 261.5 will be placed.
since price is already 261.7 and you are putting limit order for 261.5, your trade will execute with price may be 261.7 or 261.6 or 261.5 but not below 261.5 like 261.4, 261.2 and all.
But there is one risk you need to ascertain while placing SL-L orders, if the price is falling very sharply, the moment it touches 261.7 and your order gets placed and if the price falls sharply, say below 261.5 (like 261.4 and all), then your order may not execute (or partially execute) and price may still further go down to 261–> 260–>259 and you will incur huge loss. So many people prefer stop loss market orders if number of shares is not very huge.
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Thanks Venu.
I have one more doubt. Suppose I want to buy voltas futures at 261 and placed buy order limit. Is it possible that without executing my buy order at 261 it will go to 262 ?
Hi sai, Venu’s explanation is clear.
Coming to your question, it will not go to 262 without fulfilling your limit order at 261.
If price goes from 260 to 262, it means your Buy order at 261 limit price should get completed.
Hope Venu will add his views!
@Aastro: You are right, if a limit order has been placed to buy at 261, it cannot get executed at a price >261.