question regarding icicidirect

ishpal · #1 22nd November 2007, 08:36 PM

i have a question regarding icicidirect
written in their help file regarding stoploss sell order
Stop Loss Sell Order
'A' buys Reliance at Rs 325 in expectation that the price will rise. However, in the event the price falls, 'A' would like to limit his his losses. 'A' may place a limit sell order specifying a Stop loss trigger price of Rs 305 and a limit price of Rs 300. The stop loss trigger price has to be between the limit price and the last traded price at the time of placing the stop loss order. Once the last traded price touches or crosses Rs. 305, the order gets converted into a limit sell order at Rs. 300.

say i placed a buy order for reliance at Rs. 325
now i purchase a stoploss sell order with stoploss trigger price of Rs 300
and limit price for Rs 350
will it mean that the reliance will be sold out when the price reaches 300 in case of loss or 350 in case of profit

venugopal79 · #2 22nd November 2007, 08:58 PM

Isphal,

In the case mentioned by you the limit should be less than the stopless mentioned. The idea is that the trade is triggered when the stopless is reached and subsequently order exceution will happen within the limit you have mentioned.

same example: you bought reliance at 325 in margin

you want to minimise your loss and place a sell order with stopless of 310 and a limit of 305. When reliance touches 310 your order will be executed anywhere between 305-310. This way you can minimise your loss. The limit price of 350 is not allowed here.

The best thing is to place the stoploss order for safety purpose and watch the market, if the price reaches you profit zone, cancel the stoploss order and create a regular sell order.

Note: You cannot sell your position to profit using stoploss order. Hope this clarifies.

regards
R Venugopal

pakatil · #3 22nd November 2007, 09:39 PM

@Isphal,

You can not have Limit Order @ 350 & Stoploss Order @ 300, rolled in to one.

Let us say you have bot @ 325. Use Square-up option to put Stoploss Order(trigger @ 302 & limit @ 300). Place another limit order @ 350. After any one of these is executed, make sure that you cancel the other.

I was trading with ICICI earlier, never tried putting two covering orders. May be the second one requires additional Margin. Not sure.

Now I am trading with Religare and generally put two covering order without additional Margins

Cheers
PAKatil

ishpal · #4 22nd November 2007, 10:10 PM

i asked this because its written in http://en.wikipedia.org/wiki/Order_(...e)#Stop_orders
A stop order (also stop loss order) is an order to buy (or sell) a security once the price of the security climbed above (or dropped below) a specified stop price. When the specified stop price is reached, the stop order is entered as a market order (no limit).

With a stop order, the customer does not have to actively monitor how a stock is performing. However, because the order is triggered automatically when the stop price is reached, the stop price could be activated by a short-term fluctuation in a security's price. Once the stop price is reached, the stop order becomes a market order. In a fast-moving market, the price at which the trade is executed may be much different from the stop price. The use of stop orders is much more frequent for stocks, and futures, that trade on an exchange than in the over-the-counter (OTC) market.

A sell stop order is an instruction to sell at the best available price after the price goes below the stop price. A sell stop price is always below the current market price. For example, if an investor holds a stock currently valued at $50 and is worried that the value may drop, he/she can place a sell stop order at $40. If the share price drops to $40, the broker will sell the stock at the next available price. This can limit the investor's losses (if the stop price is at or below the purchase price) or lock in some of the investor's profits

ishpal · #5 22nd November 2007, 10:13 PM

i asked this question due to this written in http://en.wikipedia.org/wiki/Order_(...e)#Stop_orders

A stop order (also stop loss order) is an order to buy (or sell) a security once the price of the security climbed above (or dropped below) a specified stop price. When the specified stop price is reached, the stop order is entered as a market order (no limit).

With a stop order, the customer does not have to actively monitor how a stock is performing. However, because the order is triggered automatically when the stop price is reached, the stop price could be activated by a short-term fluctuation in a security's price. Once the stop price is reached, the stop order becomes a market order. In a fast-moving market, the price at which the trade is executed may be much different from the stop price. The use of stop orders is much more frequent for stocks, and futures, that trade on an exchange than in the over-the-counter (OTC) market.

A sell stop order is an instruction to sell at the best available price after the price goes below the stop price. A sell stop price is always below the current market price. For example, if an investor holds a stock currently valued at $50 and is worried that the value may drop, he/she can place a sell stop order at $40. If the share price drops to $40, the broker will sell the stock at the next available price. This can limit the investor's losses (if the stop price is at or below the purchase price) or lock in some of the investor's profits

that means icicidirect doesnot even follow the international rules