Key Takeaways:

• A market order prioritizes speed; a limit order prioritizes your price preference, and the two involve opposite trade-offs.
• GTT orders let you set a trigger once in your trading application and run it in the background for weeks or months without daily monitoring.
• The bracket order combines entry, target, and stop-loss, which is why many intraday traders opt for this order type as an automatic exit.
• Different trading platforms may not have all order types at their disposal within various segments.
• mastertrust charges ₹20 per order regardless of whether it's an intraday, F&O, Commodity or equity order type.

How Order Types Work Across Trading Apps in India

You open your trading application, type in a price, hit buy, and wait. Sometimes the order fills in a second. Sometimes it sits there while the stock moves away from you. The reason usually isn't the market; it's the order type you picked.

New traders tend to use only two or three order types and avoid others. This is okay unless an active market day results in a poor fill for them, or they miss exiting a position they intended to exit at a certain price level. Below is the actual behavior of Market, Limit, GTT, and Bracket orders.

What Is an Order Type?

An order type is the instruction you give a trading application about how and when to execute your trade. Every stock market trading app's interface asks you to pick one before placing an order, and the choice affects three things: the price you get, how long the order stays active, and whether it automatically manages your exit.

Selecting order type as per your preference helps you set your order execution. Understanding of order types on your trading app is of much importance. mastertrust also provides all order types, required by investors and traders, on its platforms.

Market Orders: Speed Over Price

A market order tells your trading application to buy or sell immediately at the best available price. There's no price to type in; you're selecting order execution as ‘market’ and the order gets executed immediately at the best available price.

This is the quickest method of buying or selling, and that’s why most stock trading applications tend to set the newly opened account to this type of order, simply because it is the easiest to comprehend. The trade-off for using this kind of order lies in price security.

When dealing with a highly liquid, big-cap stock, the difference between the price you quote and the price you receive is minimal; otherwise, when dealing with an illiquid stock, it can widen rapidly.

Limit Orders: Price Over Speed

The limit order, on the other hand, reverses the preference. Your trading software provides the preferred price at which you are ready to execute your trade, and your order will be sent to exchange only at that price.

If you place a buy limit order at ₹500 and the stock trades at ₹505, your order waits until the price comes down to ₹500 or lower. This is the order type most stock market trading apps recommend for mid- or small-cap stocks, where the gap between quoted and executed price is often wider.

However, the danger here is the reverse of a market order: the transaction may not take place if the price does not reach the desired level, which is why most traders prefer to keep some margin between their limit order and the current price.

GTT Orders: Set It and Walk Away

GTT stands for Good Till Triggered, and it's one of the more underused features of a modern trading application. It lets you set a trigger price and a target order that stays active until triggered, cancelled, or expired, which, on most stock market trading apps, can run for up to a year.

This is where GTT shines through: no need to constantly monitor the screen. For instance, if your objective was to go long a stock only when it drops to a certain support level, or to go short only when it breaks below your exit level. Once you place the order via your trading platform, your order remains active even when you are away from the screen.

This is crucial to note, as most losses incurred by retail investors stem from missing a key level rather than from wrong strategies. It becomes more crucial for retail investors who hold their trades for weeks or months without placing new orders

Bracket Orders: Built-In Risk Management

A bracket order (often called a BO) is designed for intraday traders who want their entry, target, and stop-loss to be placed in a single instruction. When you place a bracket order on a trading application, you're pre-defining your exit on both sides: where you'll book profit, and where you'll cut the loss.

The three legs work together. Once your entry fills, the target and stop-loss orders go live automatically. If the target is hit, the stop-loss cancels itself, and vice versa. This is close to hands-free risk management, and it's what most stock market trading apps offer for intraday positions. 

Bracket orders typically come with margin benefits too, since the built-in stop-loss reduces the exchange's risk exposure, which is part of why intraday traders lean on this order type.

Common Doubts Around Order Types

Can I combine GTT and bracket orders? 

No, GTT is for orders that are carried forward, whereas bracket orders are closed on the same trading day using stock market trading applications.

Is each trading application able to place all four types of orders?

No, some stock market trading applications have restrictions on placing GTT or bracket orders, depending on the segment.

Is it better for beginners to avoid bracket orders? 

No, but a beginner must first understand how margin and stop-loss mechanisms work, as bracket orders are automated but still require appropriate stop and target levels.

How mastertrust Helps You Place the Right Order

Trading on the platform built by mastertrust is not only easy but also more accessible thanks to the order types included here. You can use market orders for fast transactions or limit orders to ensure your price is met. Moreover, you have options like GTT and bracket order to manage your trades.

On pricing, mastertrust's brokerage structure is straightforward: ₹20 per order across intraday, F&O, Commodity and equity delivery trades, regardless of order size, so the order type you choose doesn't cost more simply because it's a GTT order versus a market order. Learn more about order execution in the mastertrust trading application and compare pricing with the brokerage calculator.

mastertrust is registered with SEBI and offers execution across NSE, BSE, MCX, NCDEX & MSEI so these order types apply across segments, not just equity.

Final Thoughts

Order types shouldn't be ignored as an insignificant issue. Your order will execute at the price you anticipated, or not, depending on the order type. Automatic exit and exposure to adverse stock movement are other issues defined by the order types. It makes sense to learn how different orders work every time you trade.

Frequently Asked Questions (FAQs):

1. What's the main difference between a market order and a limit order on a trading application?

A market order executes immediately at the current price, while a limit order only executes at your specified price or better.

2. How long does a GTT order stay active?

On most stock market trading apps, a GTT order stays active until it is triggered, cancelled, or expires, often for up to a year.

3. Do bracket orders carry margin benefits?

Yes, most trading application platforms offer margin benefits on bracket orders because the built-in stop-loss reduces the exchange's exposure.

4. Can I modify a GTT order after placing it?

Yes, most stock market trading apps let you edit the trigger price or quantity on an active GTT order before it triggers.

5. Why do order types differ across segments?

Availability depends on the segment and exchange rules, so a trading application may enable GTT or bracket orders only where the exchange permits.