Market Price Protection ensures your market order is converted to a limit order within a predefined price range. The goal? To safeguard you from sudden and extreme price movements, especially in volatile or illiquid markets.
The implementation is in alignment with key circulars issued by the NSE and BSE, including:
These references outline the foundational principles and parameters that govern pre-trade risk controls and market price protection, ensuring orderly trading and effective risk management.
When you see the nudge “Your market order is protected” on the order window, it means your market order will execute as a limit order with a small buffer over the current market price. For instance:
These buffers are part of TurboTrader's risk controls to prevent unfavorable price execution due to market volatility.
Example Scenario:
Consider that a stock is currently trading at 90.
1. Buy order: A client places a market price protection buy order for 100 shares.
2. Protection range: The system establishes a protection range, i.e., 2% above the current price since the price is less than 100. As a result, the protection limit price is set at ₹91.80.
3. Order execution: The order attempts to execute immediately, buying shares at ₹91.80 or below, ensuring the best available price within that limit.
4. Limit order placed: If the order cannot be filled for 100 shares within this range, the remaining quantity will remain open as a limit order at ₹91.80.