A Trading Member can enter various types of orders depending on his/her requirements. These conditions are broadly classified into 2 categories: time-related conditions and price-related conditions.
Time Conditions:
There are two types of time conditions viz. Day orders and IOC orders. A Day order, as the name suggests, is an order which is valid for the day on which it is entered. If the order is not matched during the day, the order gets canceled automatically at the end of the trading day.
An Immediate or Cancel (IOC) order allows a Trading Member to buy or sell a security as soon as the order is released into the market, failing which the order will be removed from the market. It can either be a partial match order or a full match order but either case, there is no question of the order staying on in the system. It gets canceled immediately.
Price Conditions:
There are 3 types of price conditions viz. limit orders, market orders, and stop-loss orders:
An order that allows the price to be specified while entering the order into the system is a limit order. On the other hand, in order to buy or sell securities at the best price obtainable at the time of entering the order is a Market order. Then there are stop loss orders. Stop Loss Orders allow the Trading Member to place an order which gets activated only when the market price of the relevant security reaches or crosses a threshold price. Until then the order does not enter the market. A sell order in the Stop Loss book gets triggered when the last traded price in the normal market reaches or falls below the trigger price of the order. A buy order in the Stop Loss book gets triggered when the last traded price in the normal market reaches or exceeds the trigger price of the order.
E.g. If for the stop-loss buy order, the trigger is 93.00, the limit price is 95.00 and the market (last traded) price is 90.00, then this order is released into the system once the market price reaches or exceeds 93.00. This order is added to the regular lot book with a time of triggering as the time stamp, as a limit order of 95.00