Types of Orders in Stock Market: Market, Limit, Stop-Loss & More

Every time you buy or sell a stock, you are placing an order. But the type of order you choose decides whether your trade executes immediately, at a specific price, or only under certain conditions. Pick the wrong one, and you may end up paying more than intended, miss the trade entirely, or exit a position at the worst possible moment.

This blog covers every major type of stock market order in India, how each works, and exactly when to use it.

What is a Stock Market Order?

Each instruction above is a different order type. Knowing which one fits your situation is one of the most practical skills in trading and investing.

What are the Types of Orders in the Stock Market?

The core types of orders are market for instant execution, limit for price control, and stop loss for automatic risk management.

What is a Market Order and When Should You Use It?

A market order executes immediately at the best price currently available in the market, prioritising speed over price. When you place a market buy order, it fills at the current ask price. A market sell order fills at the current bid price. The trade goes through almost instantly.

When to use it:

• When getting in or out quickly matters more than the exact price
• For highly liquid, large-cap stocks where price differences are minimal

What is a Limit Order and How Is It Different from a Market Order?

A limit order executes only at a price you specify, or better, giving you full control over the trade price. A buy limit order fills at your set price or lower. A sell limit order fills at your set price or higher.

When to use it:

• When you have a specific entry or exit price in mind
• When you want to avoid buying too high or selling too low

What is a Stop-Loss Order and Why Do Traders Use It?

A stop-loss order automatically exits a position when the stock falls to a price you set, converting into a market order at that point and executing at the next available price.

When to use it:

• To protect open positions from large, unexpected losses
• In intraday trading, where positions need active risk management
• When you cannot monitor the market continuously

What is a Stop-Limit Order and How Does It Differ from a Stop-Loss?

A stop-limit order triggers a limit order (not a market order) when the stop price is reached, giving you price control even after the stop activates.

When to use it:

• When you want to avoid selling at a very low price during a sharp fall
• When some price control after the trigger matters more than a guaranteed exit

What is a Trailing Stop Order and How Does It Lock In Profits?

A trailing stop order is a dynamic stop-loss where the stop price moves up automatically as the stock rises, then stays fixed when the price falls.

When to use it:

• In trending markets where you want to ride the upside while protecting gains
• When you want a hands-off way to let winners run

What is an Intraday Order (MIS) in the Stock Market?

An intraday order, placed under the MIS product type, means you buy and sell the same stock within the same trading session. All MIS positions must be closed before 3:30 PM. If not closed manually, the broker squares them off automatically.

When to use it:

• For active traders looking to benefit from intraday price movements
• When you want to use leverage without holding positions overnight

What is a Delivery Order (CNC) and Who Should Use It?

A delivery order, placed under CNC (Cash and Carry), means you buy and hold a stock beyond the same trading day. The shares settle into your Demat account, and you can hold them for as long as you want. No leverage is available, and there is no risk of automatic square-off.

When to use it:

• For long-term investors holding a stock for weeks, months, or years
• When you want full ownership of the shares without any margin risk

What are the Advanced Order Types in Stock Market Trading?

Advanced order types give traders more precise control over entries, exits, and timing. Most are available on platforms like Shoonya.

• Cover Order (CO): Requires a mandatory stop-loss at the time of placing the trade. Because the downside is predefined, brokers offer higher leverage for covered orders than for regular orders.
• Bracket Order (BO): Lets you place an entry order with both a profit target and a stop-loss simultaneously. Once the entry executes, both become active. Whichever triggers first closes the trade, and the other is cancelled automatically.
• GTT Order (Good Till Triggered): The order remains inactive until the stock reaches a trigger price you set in advance, at which point it places a limit order on the exchange. Valid for up to 365 days, making it useful for investors waiting for specific entry or exit levels.
• After Market Order (AMO): Placed outside regular trading hours. The order is queued and sent to the exchange when the market opens the next trading session, allowing you to act on research done after market close.

How Long Does a Stock Market Order Stay Active?

Along with the order type, you choose how long the order remains valid.

Market Order vs Limit Order: Which One Should You Choose?

The market order is recommended when speed matters more than price, and the limit order when price matters more than speed.

Which Order Type Should You Use in Each Situation?

What Happens If You Choose the Wrong Order Type?

Choosing the wrong order type can produce unexpected results even when your market view is correct. Here are the most common pitfalls:

• Slippage: Market orders in volatile or illiquid stocks may execute far from the displayed price.
• Missed trades: A limit order placed too far from the current price may never execute.
• Unexecuted stop-limit orders: In fast markets, the price can skip past your limit after the stop triggers, leaving the position open.
• Forced square-off: MIS positions not closed before 3:30 PM are squared off by the broker, sometimes at unfavourable prices.
• No exit plan: Skipping stop-loss orders entirely exposes you to larger-than-expected losses in sharp market moves.

Conclusion

The difference between a good trade and a costly one often comes down to which order you placed, not just which stock you picked. Start with the basics, get comfortable with each type, and build from there.

Types of Order : FAQs