Comment on Stop Loss orders - Limit/Market

Avinash commented on 28 Aug 2013, 08:30 PM

Please pardon me if my below query is too long 🙂

Please provide your inputs for the below scenarios:

1. I want to buy stock x which is currently trading at Rs 105 but i want to buy at Rs 100 and wanted to take the delivery of the stocks in my d-mat account.
I have to put a limit order. right or wrong?
a) If wrong, please tell the the correct way to do it.
b) also, if after buying the stock at Rs 100, the price increased to Rs 103, so can i sell the stock the same day by placing a sell order. The point to keep in mind is that the product type should be same in both the orders otherwise if I buy as CNC and sell as MIS, then the sell order will be treated as a short sell and the buy order will not be squared off and get delivered into my d-mat account. right or wrong?

2. For the same stock x whose current price is 105, i want to buy it at Rs 100 and at the same time in trying not make big losses, I want to set a stop loss of 95. Please keep in mind that I haven’t bought the stock yet but I want that once it is bought at Rs 100, if it comes down to Rs 95, it should be sold.
To do so, I have to place 2 different orders.
One a limit order at Rs 100 to first buy the stock and simultaneously a sell order SL with price at Rs 96 (the order will be sent to exchange when price come to 96) and trigger price at Rs 95 (the order will start executing when price comes to Rs 95).
Right or wrong?
a) If wrong, please tell me the correct way to do that. Eve if its right, is there any other way to achieve the objective stated above?
b) Can i do that in a single order instead of placing 2 separate orders?
c) Also, how to use sell order SL-M in this scenario?
d) Also please explain the price and trigger price terms in SL orders in context of scenario 2.

3. for the same stock x whose current price is 105, i want to buy it at Rs 110 and at the same time in order to not make big losses, i want to set a stop loss of 105. Please keep in mind that i haven’t bought the stock yet but i want that once it is bought at Rs 110, if it comes down to Rs 105, it should be sold.
In order to buy the stock:
I have to place one buy order SL/SL-M at trigger price Rs 110 to first buy the stock as the buy order will be triggered at Rs 110.
But i am no sure how to put a stop loss at Rs 105 when the current marker price it itself at Rs 105 but my aim is to trigger the stop loss only when i am successfully able to buy the stock at Rs 110.
The only way i think i can do it is wait first for the buy order to get execute and at that time the price will be automatically equal or greater than Rs 110 so then I can put the stop loss for Rs 105.Right or wrong?
a) If wrong, please tell me the correct way to do that.
b) Also, how to use sell order SL-M in this scenario?
c) Also, what will happen if in scenario 3, I put both the orders simultaneously when the current market price is 105?

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