Order Types in the Stock Market Explained: CNC, MIS, Limit, Market, SL, SL-M, and GTT

 

When beginners start trading, the most confusing part is the variety of order types shown on the trading terminal.

Understanding these clearly is essential to avoid losses and place orders correctly.

This article explains all major order types—using simple examples.

---

1. CNC (Cash & Carry) – For Delivery/Long-Term Investment

CNC is used when you want to BUY a stock and hold it for more than one day.

• No leverage

• Delivery to Demat account

• Suitable for long-term investors

Example:

If you buy Reliance using CNC today, it will be added to your holdings after settlement.

---

2. MIS (Margin Intraday Square-off) – For Intraday Trading

MIS is used for intraday trades (buy & sell on the same day).

• Must be squared off before market close
• Offers leverage
• Positions auto-closed if you forget

Example:

You buy Axis Bank at 720 using MIS → sell same day at 728 → profit gained.

If you don’t square off → broker closes it automatically.

---

3. Market Order – Buy/Sell at the Best Available Price

A market order executes immediately at the current market price.

Example:

If Axis Bank is trading at ₹720:

You place a Market Buy → executed at ₹720 or nearest available price

Used when speed is more important than exact price.

---

4. Limit Order – Buy/Sell at a Price You Choose

A limit order is executed only when the stock reaches your chosen price.

Example:

Axis Bank current price = ₹720

You want to buy only at ₹715

Place Buy Limit @ 715

Order executes only if price drops to ₹715.

Used for better control and discipline.

---

5. Stop Loss (SL) – To Protect Your Losses

A stop-loss order automatically sells/buys your position if price hits a certain level.

Two types:

(a) SL (Limit Stop-Loss)

You set:

• Trigger price
• Limit price

Order executes in the limit range once the trigger hits.

(b) SL-M (Stop-Loss Market)

You set:

Only trigger price

When triggered → order executes at market price.

Example:

Buy Axis Bank @ 720

Want to exit if it falls to 715

Place SL / SL-M at 715

---

6. Short Selling – Selling First, Buying Later

If your position shows negative quantity (-1), it means:

• You sold first
• You must buy back later

Example:

You short Bajaj Auto at ₹3,000

Buy back at ₹2,990 → ₹10 profit

If price rises → loss

Short selling works only in intraday MIS.

---

7. GTT Orders (Good Till Triggered) – Set & Forget

A GTT order allows you to set:

• Entry price
• Stop-loss
• Target

All in one.

The order stays active until price reaches your trigger—no need to monitor daily.

Example:

You want to buy a stock only if it falls from ₹100 to ₹90:

Set Buy GTT @ 90

Or set SL + Target for existing holdings.

This is great for long-term investors.

---

8. How to Exit a Position

To exit:

• Open Positions
• Click Exit
• System places opposite order automatically

If you bought → it sells

If you shorted → it buys

Depending on MIS/CNC/SL/SL-M settings, the appropriate order is created.

---

9. Intraday Settlement (Important)

• MIS positions must be closed before market close
• If not closed, broker auto-squares them off
• CNC positions stay in your Demat after T+1 settlement

---

10. Summary Table of All Order Types

Order Type	Meaning	Best For
CNC	Delivery order	Long-term investing
MIS	Intraday trading	Day traders
Market Order	Instant execution	Fast entry/exit
Limit Order	Specific price execution	Precision control
SL	Stop-loss with limit	Controlled risk
SL-M	Stop-loss at market	Fast exit protection
Short Selling	Sell first, buy later	Intraday profits
GTT	Long-term trigger order	Investors who don’t monitor daily

---

Final Takeaways

• CNC = Delivery
• MIS = Intraday
• Market Order = Speed
• Limit Order = Control
• SL/SL-M = Risk Protection
• GTT = Automated trigger orders
• Short selling = temporary negative quantity
• Exit = Opposite order is placed automatically

Understanding these order types will help you avoid mistakes and trade confidently.