3. Placing Your First Order: Order Types and Product Types Explained

How to Read Stocks – 10 posts for beginners | Post 3 of 10

Your account is open and funded. Before you press the button, understand exactly what kind of order you are placing.

Product types

Indian brokers ask you to choose a product type with every order:

  • CNC (Cash and Carry) / Delivery – the shares are delivered to your demat account and you can hold them as long as you like. This is what long-term investors use.
  • MIS / Intraday – the position must be closed on the same day. If you don't close it, the broker squares it off automatically before the market closes. Intraday trading carries high risk.
  • NRML – used for futures and options positions carried overnight.
Product types

Order types

  • Market order – executes immediately at the best available price. Fast, but the final price can differ from what you saw, especially in volatile or illiquid stocks.
  • Limit order – you set the maximum price you will pay (or minimum you will accept). It executes only at that price or better. Recommended for beginners because it gives price control.
  • Stop-loss order (SL) – a protective order that becomes active only when the price reaches a trigger price you set, then works as a limit order.
  • Stop-loss market (SL-M) – same as SL, but becomes a market order once triggered.
  • GTT (Good Till Triggered) – offered by many brokers, it waits for days or months until your trigger price is reached.
Order types

Validity

  • Day – the order is cancelled automatically at the end of the day if not executed.
  • IOC (Immediate or Cancel) – executes whatever is possible immediately and cancels the rest.

What happens after your order executes

  • You get a trade confirmation in the app and a contract note by email at the end of the day.
  • Under T+1 settlement, shares purchased for delivery reach your demat account the next working day.
  • When you exit a delivery holding, you authorise the debit through a CDSL TPIN/OTP or your broker's DDPI.
After your order executes

Common beginner mistakes

  • Using market orders in illiquid stocks and getting a poor price.
  • Accidentally choosing MIS instead of CNC and getting squared off.
  • Entering the wrong quantity or an extra zero. Always double-check before confirming.

Market timings to remember

Pre-open session: 9:00–9:15 am. Normal market: 9:15 am–3:30 pm. Many brokers also accept After Market Orders (AMO), which are sent to the exchange the next trading day.

Market timings

Key takeaways

  • CNC is for delivery; MIS is intraday and auto-squared off.
  • Limit orders give price control; stop-loss orders help manage risk.
  • Shares arrive in your demat account on T+1.

Practise it: try these ideas risk-free with virtual money on GPS-AUTOTRADE India paper trading.

Disclaimer: This post is for education only. It is not investment advice or a recommendation to trade any security. Investments in the securities market are subject to market risks; read all related documents carefully and do your own research.

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