A cover order is a type of intraday order that combines your buy or sell order and a compulsory stop-loss order. Its inbuilt risk-mitigating mechanism helps minimise the losses by safeguarding traders from unexpected market movements. 

To place a cover order, you have to enter a “Stop Loss Trigger” price along with the required quantity and price (market or limit). 

The “stop loss” allows you to automatically exit your outstanding position if the trade is becoming unprofitable. This way you are well aware of the maximum loss you will bear in advance, and you protect yourself from the downside. Smart, isn’t it?

Cover order = Initial Order (buy or sell) + Stop-Loss Order (sell or buy).

When you place your CO, the initial order can be a market order (automatically selected) or you can decide which price you want to buy or sell the security using limit order.

To place a cover order on Arihant Plus: 

1. Select the stock, ETF or futures or option contract for which you want to place the cover order from the Watchlist, Holdings or through explore
2. Click on Buy or Sell 
3. The order pad will open. You need to choose the Cover option on the top panel of the order pad. 
4. Enter the quantity, price (market or limit) and trigger price values in respective fields
5. Click on Buy or Sell

Click here for a quick video guide on how to place cover order.

Note: All cover orders get squared-off automatically at 3:15pm, if you have not done it yourself before.