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.
How it is identified
Bracket = Entry Order + Target Limit Order + Stop-Loss Order, with target and stop mutually cancelling
Unit
qualitative
In depth
A bracket order forces the trader to define the exit before the entry, which is its real value — the risk-reward ratio is fixed at the moment of commitment rather than negotiated with oneself later. The target and stop form a one-cancels-other pair, so only one can execute. Brackets are intraday products and are auto-squared before the close, so they cannot be used to build a multi-day position. They also carry the same gap risk as any stop: the protective leg triggers, but the fill is wherever the market is.
Worked example
Buy at ₹500 with a target of ₹515 and a stop of ₹495, giving a reward-to-risk ratio of 15 / 5 = 3. Whichever leg fills first, the other is cancelled automatically, so the position cannot accidentally be left unprotected.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Bracket Order” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.