Entering the stock market feels exciting — but also confusing. Once your demat and trading accounts are opened, the next big step is learning how to actually place an order. Many beginners get stuck here:
What is a market order? What is a limit order? Should I choose intraday or delivery? What on earth is a stop-loss?
This article breaks down every major order type in a simple and practical manner, using real-world trading examples. By the end, you’ll know exactly how each order works and when to use which one.
1. Before You Begin: Account Opening and Power of Attorney
If you're new to the markets, your journey usually starts with opening a demat and trading account. One concept that confuses beginners during account opening is the Power of Attorney (POA) — a document that allows your broker to transfer shares from your demat account when you sell them.
Once your account is ready, the next question is, How do I place an order?
That’s exactly what we cover next.
2. Types of Stock Market Orders Explained
Modern trading platforms offer multiple ways to buy or sell shares. These options exist because investors and traders have different goals — some want immediate execution, others want a specific price, some want risk protection.
Let's explore each category one by one.
3. Simple Orders
Simple orders are the most basic. They include:
a. Market Order
A market order buys or sells a stock at the current market price.
You cannot enter a price manually.
Useful when immediate execution is more important than the exact price.
Example:
Infosys is trading at ₹771. You place a market buy order. The order executes instantly at the best available price.
When to use:
When the market is stable
When you need quick entry or exit
For highly liquid stocks
b. Limit Order
A limit order lets you specify the price at which you want to buy or sell.
Example:
Current price: ₹771
Your limit buy order: ₹760
The order executes only if the price falls to ₹760.
When to use:
When you have a clear price in mind
To avoid overpaying in sudden market spikes
c. Stop-Loss Market / Stop-Loss Limit
Stop-loss orders help protect you from heavy losses.
Why Stop-Loss Exists
Suppose you buy a stock at ₹770. The price begins to fall. How much loss can you tolerate?
If your threshold is ₹760, you can place a stop-loss order at ₹760.
If the price touches ₹760, your position exits automatically.
Stop-Loss Market
The order gets executed at market price once your trigger level hits.
Stop-Loss Limit
Both trigger and limit are defined by you.
More control, but riskier if sudden price gaps occur.
Stop-loss is a vast topic and deserves a full article by itself — but this overview gives you the basic idea.
4. Delivery vs Intraday
When placing an order, you must also choose your position type:
a. Delivery
You buy the shares and they get added to your demat account.
You can hold them for days, months, or years.
b. Intraday
You buy and sell within the same trading day.
If you do not square off the position, the broker automatically closes it near market close.
Margins are higher, risks are higher, discipline is crucial.
5. Time-in-Force Instructions (Day vs IOC)
Time-in-force tells the system how long your order should remain active.
a. DAY Order
Your order stays valid till 3:30 PM.
If your price is not reached by then, it gets cancelled automatically.
b. IOC (Immediate or Cancel)
Think of it as the Bajirao Singham style of ordering:
Execute instantly — or cancel immediately.
No waiting. No patience needed.
6. AMO (After Market Orders)
AMO allows you to place orders after market hours (post 3:30 PM).
These orders get executed the next trading day when the market opens.
Useful for:
People who are busy during market hours
Those who plan trades in advance
7. Cover Order (CO)
Cover orders are ideal for traders who want discipline built into the system.
A CO requires you to enter:
Buy/Sell Price
Stop-Loss Price
You cannot place the order without defining your stop-loss.
Why it’s useful:
Prevents emotional trading
Automatically limits risk
Encourages professional behaviour
Example:
Buy Price: ₹760
Stop-Loss: ₹750
Maximum loss = ₹10 per share
8. One Cancels Other (OCO) – Also Called Bracket Order
This is one of the most powerful order types for traders.
In an OCO order, you define:
Buy Price
Target Price
Stop-Loss
How it works
If one gets executed, the other gets cancelled automatically.
Scenario 1: Target hits
You buy at ₹760
Target = ₹800
Stop-Loss = ₹750
If the stock rises to ₹800:
Your target executes
Stop-loss gets cancelled
Scenario 2: Stop-Loss hits
If price falls to ₹750:
Your stop-loss executes
Target gets cancelled
This protects both sides — your risk and your profit.
This is why many professional traders love OCO.
9. Cancelling or Modifying an Order
Every order you place shows up under the Orders section of your platform. From here you can:
Cancel open orders
Modify pending orders
Track order status (Open / Executed / Cancelled)
This helps you stay in control of your trades at all times.
10. Final Thoughts: Your First Step Into the Market
Many people feel confident after learning the basics, but hesitate to place their first order. That’s natural. The key is to:
Start small
Do your own research
Understand order types
Practice discipline
Buy your first stock thoughtfully — not because someone told you to, but because you understand the company and the risk.
Once you place your first order, you will realize the stock market is not as intimidating as it seems.
Keep learning, keep researching, and enjoy the journey.
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