Can you please confirm my understanding below for an equity limit order in cash market.
#1 For a Buy order, it can only be executed in the exchange where I have placed by Bid. Meaning, Zerodha system WOULD NOT identify the better price (cheaper) across exchange.
#2 For a Sell Order, I see Zerodha system intervenes to get the higher LTP across the exchange for higher profit to customers. Bluntly put, Can I assume my Sell order is exchange independent.
Hi @deejaymdu
Your understanding is correct for Delivery trades. For Intraday trades, One has to trade in the same exchange.
That’s correct. Here’s the rationale:
The stocks in a demat account don’t have any exchange mapped to them. One can take the delivery of stocks in one exchange and freely sell them in either NSE or BSE from the next day of purchase. By default, Kite reflects the holding value as per the price on the exchange where the previous closing was higher.
The default exchange will open up in the order window when selecting the Exit option from the holdings. To sell holdings from a different exchange (NSE or BSE), add the stock to Kite Marketwatch and proceed with the selling process.
Maybe I’m interpreting your question differently than @Meher_Smaran
The same applies for sell orders too.
A sell order too can only be executed in the exchange that one chooses while placing the offer.
It is not as if the sell order would get executed in the most profitable exchange of the two (NSE or BSE) based on the highest LTP.
Yes, the sell order can be placed in either of the exchange irrespective of the exchange from which the shares were bought earlier, provided the stock is listed in both the exchanges. But i don’t think that was your question.
In my limited experience, I haven’t seen any such intervention by the Zerodha to execute the sell order automatically in the exchange having the highest LTP (most profitable).
Any order that gets initiated from the holdings page, be it Limit or Market, be it Sell or Buy, it will be placed in the default exchange, unless we chose the other exchange manually.
Ultimately we get to choose in which exchange we would like to place the buy/sell order, which is either the default exchange (which keeps changing) or the other exchange.
It would be wrong to assume that the default exchange that appears in the holdings page is the most beneficial exchange and will always result in sell orders getting executed at the highest LTP available, of the two exchanges.
The default exchange here means the exchange having the highest closing price for a particular stock, which is used to determine the value of the holdings at the end of each day.
So, I don’t think when u place a sell order (market order), the order automatically gets placed in the exchange having the highest LTP.
We need to check the price quoted in both the exchanges and determine which is most profitable and place the order accordingly.
Zerodha doesn’t intervene to execute the trade in the most profitable exchange.
For limit orders, it wouldn’t matter in which exchange you place the sell order, as you determine the price at which you want to sell, so there is no question of intervention or most profitable exchange etc.
To put it simply, you have to choose the exchange through which you want to sell, if not, the sell order will be placed from the default exchange and this default exchange should not be wrongly interpreted as the most profitable exchange.
P.S.
Zerodha does alert us through nudges, when the LTP for a stock differs drastically between the two exchanges. And this alert is for both buy and sell orders, here too, it is left to the user’s choice as to which exchange they want to execute their order from and Zerodha doesn’t automatically choose the most beneficial exchange.