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Why Are Intraday (MIS/CO) Orders Not Allowed for Some Stocks?

Post Date : May 15, 2025

Intraday trading is a popular strategy where traders buy and sell stocks within the same trading session to capitalize on short-term price movements. RMoney offers product types like MIS (Margin Intraday Square-off) and CO (Cover Order) for such trades, which provide leverage—allowing traders to trade with more capital than they hold in their account.

However, not all stocks are available for intraday trading, and there are regulatory or risk-based reasons for these restrictions.

Why Are Intraday Orders Blocked for Some Stocks?
Brokers like RMoney may block intraday (MIS/CO) orders on certain stocks to reduce the risk of:

• Short delivery
• Losses exceeding margin availability
• Poor order execution due to illiquidity

In such cases, clients are allowed to place only CNC (Cash & Carry) or delivery-based orders.

To learn more about order types, see: What does CNC, MIS, and NRML mean?

Common Reasons Why Intraday Trading Is Restricted
1. High Volatility or Sudden Price Movements
In volatile market conditions, prices can fluctuate sharply, increasing the risk of losses and difficulty in exiting intraday positions. Brokers may disable MIS/CO orders during such times to protect clients and manage credit exposure.

2. Low Liquidity or Thin Trading Volume
If a stock has low trading volume, it may be difficult to enter and exit positions without significant slippage. To ensure smooth order execution, intraday orders may be restricted.

3. Small Circuit Limit Range
Stocks with tight circuit limits are more prone to price freezes. If a stock hits its upper or lower circuit during the day, traders may be unable to square off positions, leading to short delivery risks.

To learn more, see: “What are circuit limits or price bands”?

4. IPO Listing Day
On the listing day of an IPO, price discovery is unpredictable, and volatility is typically high. For risk control, brokers may block intraday trades on newly listed stocks.

5. High Margin Requirement or Risk of Penalties
Certain stocks demand higher margins, and inadequate margin can result in margin shortfalls and penalties. Blocking intraday trades helps clients avoid these issues.
To learn more, see: What is a margin penalty, and why is it charged?

6. Regulatory Restrictions
Stocks that fall under regulatory surveillance are not eligible for intraday trading. This includes categories like:

• T2T (Trade-to-Trade)
• ASM (Additional Surveillance Measure)
• GSM (Graded Surveillance Measure)
• Unsolicited SMS category

These measures are designed to prevent manipulation and protect retail investors.
To learn more, see: “What is short delivery and what are its consequences?”

What Can Traders Do?
If MIS or CO orders are blocked for a stock, clients can still place CNC (delivery) or NRML orders depending on their strategy. It’s essential to check product type availability before placing any order.

Need Help?
For more information, contact RMoney at 0562-4266600 / 0562-7188900 or email us
at askus@rmoneyindia.com