What is a Cover Order and Bracket Order?

Cover Orders (CO) and Bracket Orders (BO) are advanced intraday order types that let you define your risk parameters stop-loss, and optionally a target at the time of order placement itself. Rather than managing exits manually, the platform handles them automatically once the entry is executed.

Both order types are available on the RMoney Tradion App. Click here  to Learn How to place BO/CO in RMoney Tradion App.

Note:-

CO and BO are MIS (Margin Intraday Square-off) orders. Any open position under these order types will be automatically squared off before market close, regardless of whether your stop-loss or target has been hit.

Cover Order (CO)

A Cover Order (CO) is an intraday order that comes with a compulsory stop-loss. When you place the trade, the stop-loss is automatically added along with it to help control risk.

For example, if you buy a stock at ₹500 and set a stop-loss at ₹490, your order will automatically exit if the price drops to ₹490. This helps prevent bigger losses if the market moves against your trade.

In a Cover Order, the stop-loss cannot be removed until the position is closed. Traders usually use this order type when they want better risk management while trading in volatile markets.

To place a Cover Order, you only need to enter:

• Quantity of shares
• Buy or sell price
• Stop-loss value

Bracket Order (BO)

A Bracket Order (BO) is an intraday order that allows you to place a trade along with both a stop-loss and a target price at the same time. Once your main order is executed, the system automatically places both exit orders.

If either the target or stop-loss gets hit first, the other order is cancelled automatically.

For example, suppose you buy a stock at ₹500, set a stop-loss at ₹490, and a target at ₹520. If the stock rises to ₹520, your profit gets booked automatically. If the price falls to ₹490 instead, the stop-loss gets triggered to limit the loss.

Bracket Orders are useful for traders who already know their risk and expected profit before entering a trade, as the trade can be managed automatically without constant monitoring.

To place a Bracket Order, you need four inputs:

• Quantity: number of shares to buy or sell.
• Entry Price: Market or Limit.
• Stop-Loss Value: rupee difference from entry price (not the absolute stop-loss price).
• Target Value: rupee difference from entry price at which you want to book profit.

Disclaimer: The information provided in this blog is for educational purposes only and should not be considered financial advice or a recommendation to invest. Intraday trading involves substantial risk of loss. Cover Orders and Bracket Orders are MIS product types and all open positions will be squared off at end of day. Please consult a SEBI-registered investment advisor before trading.