What is the difference between normal CNC MIS?

General
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An excerpt from the blog on Order Types (point no. 10)

http://zerodha.com/z-connect/tradezerodha/zerodha-trader-software-version/orders-place-modify-cancel-view

10. Prod Type (Product Type): MIS ( Margin intraday square off), CNC (Cash n Carry) and NRML( Normal). The following details are important so ensure you remember the same:

While trading equity (Stocks on NSE/BSE)

Use MIS for Intraday Trading (9:00 AM to 3:20 PM): At 3:20 PM, all MIS positions are auto squared off. Using MIS, you will get Intraday Leverage (between 3 to 10 times) based on what stock you are trading. If it’s a good stock you get more leverage, and if it’s not a good stock you get less or no leverage.

Use CNC for delivery-based trading: When you buy using CNC, you will not get any leverage, but there won’t be any auto square off’s either. Once bought, the stock would be sent to your Demat account and if you sell using CNC, stocks will be debited from your Demat account. Note that you won’t be able to sell with product type CNC without holding the particular stock in your demat account.

You can convert MIS to CNC and vice versa, by visiting Admin positions (F11) or by visiting Trade book (F8). You will need 100% cash in your account to convert to CNC.

While trading Futures & Options( NSE/BSE)

Use MIS for Intraday trading (9:00 AM to 3:20 PM). At 3:20 PM, all MIS positions are auto squared off. The benefit of using MIS for Futures & Options is that you get extra leverage (not for buying options). You will need only 40% of Exchange stipulated margin by using this product type. So for example, if Nifty futures overnight margin is Rs. 25,000, you will require only Rs 10,000 (40% of 25,000) if you use the product type as MIS.

If you don’t want any excess leverage, use the product type NRML and you would not have to worry about auto square offs.

You can convert your MIS position to NRML and vice versa by visiting Admin positions (F11) or by visiting trade book (F8). You will need stipulated NSE overnight margins to convert to NRML.

While trading Currency (CDS)

Only one product type NRML as we don’t offer any additional leverage than what is offered by the exchange.

While Trading Commodities (MCX)

Use MIS for Intraday trading (10:00 AM till 30 minutes before market close). At 30 minutes before market close, all MIS positions are auto squared off. The benefit of using MIS for Commodity Futures  is that you get extra leverage. You will need only 50% of overnight exchange stipulated margin by using this product type. So for example, if Crude futures overnight margin is Rs. 25,000, you will require only Rs 12,500 ( 50% of 25,000) if you use the product type as MIS.

If you don’t want any excess leverage, use the product type NRML and you would not have to worry about auto square offs.

You can convert MIS to NRML and vice versa by visiting Admin positions (F11) or by visiting Trade book (F8). You will need stipulated MCX overnight margins to convert to NRML.

Hope this helps!

Regards,

Mangesh

3 Likes
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@Mangesh, nicely explained…very neat. Thanks.

1 Like
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Thanks for the compliments $ud3$h… Welcome!

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Please let me know, whether Auto square off is in Normal Product type.?

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NRML/CNC Pending orders will get cancelled at the end of the day…in futures NRML orders gets auto squared off in some commodities where there is an obligation to take delivery

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Can anybody explain the difference between CNC and MIS

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MIS means Margin Intraday Squareoff - It means if you open the trade today, you need to square off (close) in same day. Otherwise Zerodha will automatically square off at 3:20 pm. For MIS, Zerodha provides more margins as it is intraday

CNC means Cash n Carry - You buy the shares today, and either you can close it (sell it) today. Or if you dont sell, it goes to your Holding section (Demat) next day. For CNC, Zerodha dont provide extra margin.

MIS - Mostly traders will use

CNC - Mostly investors will use

1 Like
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Is there any charges for converting MIS to CNC and visa versa

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No charges for conversion

Brokerage charges may differ as MIS has different charge than CNC, but for the conversion no extra charge

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Why you need to specify at order placement if i am going to square off today or will take delivery.it depends on market behavior and if i do not square off eod it is automatically delivery .
even in T2T shares i can sell /buy first and buy/sell next as long as both the transactions result in delivery.

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Thanks for your reply sir… can you please explain about brokerage charges difference for these two options!? brokerage depends on number of shares we trade or value of total shares we trade… thanks in advance

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Brokerage calculator check on Zerodha website

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Respected Sir,
I am new trader I traded today for first time in my life. My question is I want to take delivery of shares by using CNC. Now suppose i will hold stock for next 15 days and I want to keep stop loss everyday to my share. Then
1- Do I need to set stop loss every day ? I mean do I need to renew stop loss every new day for 15 days ?
2- If above answer is yes then my question is suppose I buy share at 100 and put stop loss at 90 today
and my stop loss order cancels at the end of day. And tomorrow after opening the market or even using AMO I set my stop loss at 90 again. And suppose market opens gap down below 90 say 88 then my stop loss will be useless ?

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  1. Yes everyday

  2. Yes useless

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Thank You for the answer !
One more question I have is
Suppose I bought share using CNC now can I set these 2 things at a time
1- Say I bought share at 100 and I want to keep stop loss M at 90
2- I also want to keep my sale limit order @ 115/-
is it possible to keep above 2 orders at a time. ?
because I do not want to use bracket order which will be squared off at the end of day.
Please also suggest any solution by which I can keep sale order and stop loss order for the same share
at a time if any ?

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I think both is not possible at one time

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What is auto squared off…? Does that mean it will sell the shares automatically…? Today is my first day in trading…

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@ShubhS9 - I wanted to know about the technical glitch impact on MIS orders.

Suppose a trader gets into a short straddle position via MIS order intending to square off the same before EOD. If for some reason the broker or exchange faces a technical glitch and the square-off is not successful - what are the ramifications?

If the trader faces losses the next day due to this technical glitch, will the broker reimburse?