Zerodha Product Codes Explained- CNC, MIS meaning, SL & More cover

Zerodha Product Codes Explained- CNC, MIS, SL & More!

Understanding Zerodha Product Codes- CNC, MIS, SL & More: Zerodha is one of the biggest stock brokers in India with over 30+ lakh clients. And with this huge client base, obviously Zerodha products and trading platforms are quite widely used.  One such popular product offered by Zerodha is its Kite Trading platform.

Anyways, the client is net to trading or investing, a few of the acronym used on this platform may be difficult to understand. For example, terms like CNC, MIS, SL etc might not make much sense to you if you do not know what they stand for and what’s their use. Nonetheless, the different Zerodha product codes will be simple to use once you understand it.

In this post, we’ll discuss the different Zerodha product codes and will try to simplify them. Let’s get started.

Also read: How to Open a Demat and Trading Account at Zerodha?

What are Zerodha Product Codes?

Zerodha product codes are basically short forms for different codes to perform different actions. For example CNC, MIS, QTY, PRICE, SL, etc. Here is a screenshot of the KITE app while placing a buy order by showing different codes.

Zerodha Product Codes Explained- CNC, MIS, SL meaning 2

You can note the different Zerodha product codes in the above image. Understanding what these quotes mean is really important if you want to place your buy/sell order correctly. Let’s start with the two easily understandable codes are QTY and PRICE.

Here, QTY means the number of quantities of stock that you want to buy. PRICE is the cost at which you want to buy the share.

Next, here are the abbreviations of the other codes are that we are going to discuss in this article:

  • CNC: Cash N Carry
  • MIS: Margin Intraday Square-off
  • MKT: Market Order
  • LMT: Limit Order
  • SL: Stop Loss
  • SL-M: Stop loss market
  • Trigger Point
  • Disclosed quantity

Now, before we discuss the other Zerodha product codes, here are a few frequently used terms that you need to know first.

— Market order (Market): When you want to buy/sell a share at the current market price, then you need to place a market order. For example, if the market price (current trading price) of a stock is Rs 100 and you are ready to buy the share at the same price or the price of the market, then you can place a market order. Here, the order is executed instantaneously at the market price.

However, please note that the market price keeps fluctuating second-by-second. Therefore, your purchase price might be little different than what you may have noticed before placing the order.

— Limit order (Limit): A limit order means to buy/sell a share at a limit price. If you want to buy/sell a share at a given price, then you place a limit order. For example, if the current market price of a company is Rs 200, however you want to buy it at Rs 195. Then you need to place a limit order. When the market price of ABC falls to Rs 195, then the order is executed.

— Stop-loss (SL): STOP LOSS is used to limit the losses when the price of a stock starts falling. For example, let’s say that you are entering stock at Rs 300. However, the price of that stock starts falling and you fear to book losses. In such a scenario, you can place an order to limit the loss to Rs 295. It specifies that you want to execute a trade but only if the specified price is met. Stop-loss is a very good tool to limit risks.

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Here’s a video on how to use Stop-Loss in Zerodha efficiently.

Common Zerodha product codes (SL, MIS, CNC, etc)

  • LMT: This is used for placing a limit order.
  • MKT: This is used for placing a market order.
  • Trigger Price: This is used in stop loss orders. It is the price at which you want ‘stop-loss’ to be triggered.
  • Stop Loss (SL): This is used to place a stop loss at the limit price. Here you need to specify a Limit price and a trigger price. When the trigger price is reached, then the stop loss order is sent to the exchange at a limit order mentioned by you.
  • Stop loss market (SL-M): This is used to place a stop loss at market price. Here you just have to specify the trigger price. When the trigger price is reached, then the stop loss order is sent to the exchange at market price.
  • MIS in Zerodha: MIS stands for Margin Intraday square off. It is used for Intraday trading with leverage. All MIS position is auto squared off at the end of the day session.
  • CNC: It stands for Cash n carry. CNC is used in delivery based equity. There is no leverage provided in CNC. However, there is also no auto square off at the end of the session.
  • Disclosed quantity: This allows traders to disclose only a part of the actual quantity of the stocks that he bought or sold. This disclosed quantity should be more than 10% of the order quantity. For example, let’s say you bought 1000 stocks. However, you can disclose only 400 stocks (if you want). Only the discloses quantity will be shown on the market screen.

Quick Note: What is the use of disclosed quantity? The order book is open to all active people on the exchanges. Therefore, all these people can see what quantity of stocks you have ordered. However, the problem here is that once they know your quantity and price, they can change their own order (increase/decrease their order amount/quantity). This might affect your orders adversely. Disclosed quantity is beneficial for those people who trade in large quantities.

Now, these were the common terms that are shown in the marketplace section while placing buy/sell order in Zerodha.

However, there are also a few other Advanced Zerodha product codes. Although you can execute all your buy/sell orders without changing the advanced order, however, it’s better to have full knowledge of these product codes. 

Zerodha Product Codes Explained- CNC, MIS, SL meaning

Advanced Zerodha Product Codes (BO, CO, IOC, etc)

Here are the advanced Zerodha product codes:

  • REGULAR: Regular orders
  • BO: Bracket order
  • CO: Cover order
  • AMO: Aftermarket order
  • DAY: Day validity
  • IOC: Immediate or Cancel

AMO: It stands for aftermarket orders. You can use this facility to place an order when you can’t buy/sell during the trading time. You can place your order between 4:00 PM to 08:59 AM i.e. after the post-closing session and before the pre-opening session.

Brackte Order (BO): Bracket order is used for higher leverages (than that of MIS). Here, you place an Intraday buy or sell at limit order with a target price and a compulsory stop loss. All the orders are squared off before the end of the day.

Cover Order (CO): Cover order is used for placing intraday buy or sell at the market order for high leverage (that trading using MIS). Here you just have to specify the stop loss. All the orders will be squared off before the end of the day.

IOC: It stands for ‘Immediate or cancel’. Here the order is executed as soon as it is released. If the order fails to execute, then it is immediately canceled. In the case of part execution, the remaining quantity (which is not executed) will be canceled.

Summary

Let’s quickly summarise a few of the most frequently used Zerodha product codes discussed in this post.

  • LMT: This is used for placing a limit order.
  • MKT: This is used for placing a market order.
  • Stop Loss (SL): This is used to place a stop loss at the limit price.
  • MIS in Zerodha: MIS stands for Margin Intraday square off.
  • CNC: It stands for Cash n carry. CNC is used in delivery based equity.

That’s all for this post. I hope the article is useful to the new traders and investors. If you have any questions regarding any Zerodha product codes, feel free to comment below. I will be glad to help. Happy Investing!!

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