Disclosed quantity is the quantity that you want it to be shown in market depth. it will be less than the acutal quantity. This feature is useful for those selling and buying in large quantity. When others see there is a buyer or a seller with large quanity, others will try to increase or decrease the price seeing his entry. Using this feature, he can disclose only a portion of his actual quantity. There is a limit on disclosed qty, it should be atleast 10% of acutal quantity.
When you place a Buy/Sell Limit order, you choose PRICE TYPE as LIMIT, QTY is your desired quantity say 3000 shares, PRICE you enter the limit price say 120 rupees, etc.
But there is another column there which says DISC QTY. This is disclosed quantity. You can mention here any value greater than 10% of the total shares of your order, say 300 for example.
Why disclosed quantity is useful?
When you place any order, it is sent to NSE from the broker. NSE collects your information and displays it in the screen of all other traders, as MARKET DEPTH DATA. If your order is in best 5 prices which is close to the current market price, then only your Order Price and Ordered Quantity will be displayed in the market depth window. If you order 3000 and someone is ordering 2000 in the same price say 120 rupees, they both will get added and will be displayed as 5000 shares @ 120 in market depth window.
Traders watch this information and get a clue that someone is willing to buy/sell 5000 shares, so they immediately change their LIMIT ORDER PRICE to match your price or they issue a MARKET order knowing that they can get 5000 shares from your order alone.
Suddenly seeing 5000 shares and executing them will create an imbalance and makes some demand/supply which will alter the price to an extent.
To avoid this, while placing orders, it is usually helpful to enter some lesser quantity in disclosed price. In that way people will not know, how many shares exactly you are buying/selling.
Disclosed quantity allows a trader to disclose only a part of the actual quantity he wishes to buy/sell. Once the disclosed quantity is specified, the order is sent to the exchange and only the disclosed quantity will be shown on the market screen. The disclosed quantity should not be greater than or equal to the actual order quantity and should also not be less than 10% of the order quantity.
Eg :- If the customer wants to buy/sell 4000 shares, with a disclosed quantity condition of 500 shares, only 500 shares will be displayed to the market at a time. After this is traded, another 500 shares will be automatically released until the order is fully executed.
why there is no disclosed order for Future and option products?