Stop Loss for CNC (Cash N Carry) orders


I have used Stop loss on Intraday orders, but I am not sure how it works on CNC orders.

Market is very volatile today and Cochin Shipyard IPO especially is fluctuating a lot. How do I limit losses around Rs. 510 and set a target for around Rs. 540? Current Market Price is around Rs. 520/-

Raj Pawan G

Place a Sell SL/SLM order form the Cochin Shipyard Sell order window.

Please note that you can either place a target or stoploss for Holdings in your account. You cannot place both target and stoploss at the same time.
Let’s see why. If you have an open target and stoploss and if your target gets executed, then your holdings are already sold out. But at this time your stoploss would still remaim open and if the stoploss order also executes, then this will lead to a naked sell position and the shares will be short-delivered if you dont buy it back before market closes because you ended up selling shares that you didn’t have. This will lead to an auction penalty and additional margin being blocked in your account until the short delivered shares are bought back from the auction market.

On a volatile market day, it would be wise to place a stoploss and trail your stoploss as necessary. If your target is achieved, then cancel your stoploss and place a target order.

1 Like

Thank you so very much for detailed answer!

However, as the orders in Bracket Order (intraday) compliment the stoploss and target orders I was expecting the same would be possible in Cash N Carry orders too! It would have been technically possible for Zerodha to provide the facility like Bracket orders where if your target order is fulfilled the stoploss order gets cancelled automatically and vice-versa. I am not sure why this is not provided in CNC type of orders, strange!

1 Like

Well, a bracket order has an entry limit order with the target and the stoploss. Only after the entry order is executed, a target and stoploss is placed at the exchange.
If you intend to enter a CNC position along with a target and a stoploss, then it’ll be more beneficial for you to take a BO position as the margin required is way lesser.

True, I get what you are telling!