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Orders, Execution & Market Structure

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Orders, Execution & Market Structure

After-Market Order

An order placed outside trading hours that is queued by the broker and released to the exchange when the next session opens.

Test: the order is accepted after the close and submitted to the exchange at or just before the next session's start qualitative Orders, Execution & Market Structure

Algorithmic Trading

The use of computer programs to generate and manage orders according to predefined rules, without manual intervention on each order.

Test: order generation, timing or routing is determined by a program rather than by a human decision on each individual order qualitative Orders, Execution & Market Structure

All-or-None Order

An order that must execute in full or not at all, prohibiting partial fills.

Test: the order executes only if the entire quantity can be matched; otherwise nothing is executed qualitative Orders, Execution & Market Structure

Ask Price

The lowest price a seller in the order book is currently willing to accept for a security.

Best Ask = lowest sell limit price resting in the order book ₹ Orders, Execution & Market Structure

Auction Settlement

The exchange process that buys shares in a special auction when a seller fails to deliver them on the settlement date.

Cost to the defaulting seller = Auction Price - Original Sale Price, plus penalties, with the auction price capped at a stated band ₹ Orders, Execution & Market Structure

Auto Square-Off

The broker's automatic closing of an intraday or margin-deficient position when a cut-off time or a risk threshold is reached.

Test: the broker's risk system closes the position without client instruction, on time or on a margin shortfall qualitative Orders, Execution & Market Structure

Basket Order

A single instruction that submits orders in several securities at once, in preset quantities.

Test: one submission generates multiple child orders across different securities, each executing independently qualitative Orders, Execution & Market Structure

Bid Price

The highest price a buyer in the order book is currently willing to pay for a security.

Best Bid = highest buy limit price resting in the order book ₹ Orders, Execution & Market Structure

Bid-Ask Spread

The difference between the best ask and the best bid, representing the immediate cost of a round trip in a security.

Spread % = (Best Ask - Best Bid) / Mid Price x 100, where Mid Price = (Best Ask + Best Bid) / 2 % Orders, Execution & Market Structure

Block Deal

A large trade executed in a dedicated exchange window at a negotiated price within a narrow band around the reference price.

Test: minimum order value as prescribed by the exchange, executed in the block window at a price within the permitted band of the reference price ₹ crore Orders, Execution & Market Structure

Bracket Order

A three-part intraday order that places an entry together with a linked profit target and stop-loss, cancelling one when the other fills.

Bracket = Entry Order + Target Limit Order + Stop-Loss Order, with target and stop mutually cancelling qualitative Orders, Execution & Market Structure

Bulk Deal

A trade or set of trades by one client in a single security exceeding a stated percentage of its listed shares, which must be disclosed.

Test: total quantity traded by one client in a security on one day exceeds 0.5% of the number of shares listed % Orders, Execution & Market Structure

Call Auction

A matching mechanism that collects orders over a window and executes them all at a single price that maximises traded quantity.

Equilibrium Price = the price at which the largest quantity can be matched; ties are broken by minimum unmatched quantity ₹ Orders, Execution & Market Structure

Circuit Breaker

An automatic trading halt triggered when an index or a security moves beyond a preset percentage from a reference price.

Trigger: index movement of 10%, 15% or 20% from the previous close, with halt duration depending on the level and the time of day % Orders, Execution & Market Structure

Clearing Corporation

The entity that steps between buyer and seller after a trade, guaranteeing settlement to both sides.

Test: through novation the clearing corporation becomes buyer to every seller and seller to every buyer qualitative Orders, Execution & Market Structure

Clearing Member

A member of a clearing corporation that settles trades and posts margins, either for itself or on behalf of trading members.

Test: the firm holds clearing membership and is directly liable to the clearing corporation for settlement obligations qualitative Orders, Execution & Market Structure

Co-location

The practice of placing a trading firm's servers in the exchange's own data centre to minimise the time an order takes to arrive.

Test: the participant's matching-engine access is from within the exchange data centre rather than over a public network qualitative Orders, Execution & Market Structure

Cover Order

An intraday order that must be placed together with a compulsory stop-loss, allowing the broker to grant higher leverage.

Test: entry and a mandatory stop-loss are submitted as one instruction; margin is computed from the distance between them qualitative Orders, Execution & Market Structure

Day Order

An order that remains valid only for the current trading session and is cancelled automatically at the close if unfilled.

Test: the order's validity expires at the end of the session in which it was placed qualitative Orders, Execution & Market Structure

Direct Market Access

An arrangement in which a client's orders reach the exchange through a broker's infrastructure without manual intervention by the broker.

Test: orders pass automated risk checks and route to the exchange without a dealer keying them in qualitative Orders, Execution & Market Structure

Disclosed Quantity

The portion of an order's total size that is made visible in the public order book.

Test: disclosed quantity is less than total quantity and meets the exchange's minimum disclosure percentage shares Orders, Execution & Market Structure

Good-Till-Triggered Order

A standing instruction held at the broker for up to a year, submitted to the exchange only when its trigger price is reached.

Test: the instruction rests with the broker, not in the exchange order book, until the trigger condition is met qualitative Orders, Execution & Market Structure

High-Frequency Trading

Algorithmic trading characterised by very short holding periods, very high order counts and competition on latency.

Test: holding periods measured in milliseconds to seconds, with order-to-trade ratios far above those of ordinary participants qualitative Orders, Execution & Market Structure

Iceberg Order

A large order that reveals only a small portion to the order book at a time, refreshing as each slice is filled.

Test: total quantity exceeds the disclosed quantity, and a fresh slice enters the book only after the previous one is fully executed qualitative