Frequently Asked Questions
What is Cover product?
- Cover Product is an order placement feature where you can take a position at market price and simultaneously place a stop loss limit order. This will minimize the loss on the position.
- Thereby it gives a clear view of maximum downside involved in a particular position.
What is First Leg order?
- The marketorder that is placed for creating the position is called First Leg order
Can I place a limit First leg order?
- No, First leg order is always a market order
What is a Stop loss Limit order?
- The First leg order as defined above will help you take a position. Assuming you have taken a buy position, your cover will naturally be a sell order. This is a Stop loss Limit order
- A Stop loss Limit order allows the client to place an order, which gets triggered only when the market price of the relevant contract reaches or crosses a trigger price specified by the trader in the form of 'Stop Loss Limit Price'
Can the Stop loss Limit order be modified?
- Yes, one can modify the Stop loss Limit order. The price and order type (limit to market) can be modified in Stop loss Limit order.
Is Cover product is applicable for both Futures and Option?
No. Cover product is only available for Futures contracts
What is the quantity that can be submitted for First leg order?
The max quantity that can be submitted for fresh orders is the total of best 5 Bid/offer quantities that is available in the best bids and offers. If the quantity that one input is greater than the quantity available in the best 5 bids and offers then the order will not go through.
What will be the price at which the First Leg order will be placed?
The price of First leg order would be calculated as the weighted average price of the best 5 bids and offers available for sell and buy order respectively.
What is the minimum stop loss % one needs to input while placing an order in Cover product?
- For Index Futures the minimum stop loss trigger price should be of 0.25% from the market price and the stop loss limit price should be minimum 0.50% from the trigger price
- For Stock Futures (part of Nifty50) the minimum stop loss trigger price should be of 0.50% from the market price and the stop loss limit price should be minimum 1% from the trigger price
- For other Stock Futures (apart of Nifty50) the minimum stop loss trigger price should be of 1% from the market price and the stop loss limit price should be minimum 2% from the trigger price
What is the margin that is charged on the First Leg order?
Margin will be calculated basis SPAN + Exposure + adhoc margin. The adhoc margins will be additional margins being charged and / or the stop loss difference for the said transaction.
Would the Margin be recalculated when the order gets executed?
Yes, at the time of order placement the current market price at that point of time is considered. It may happen that execution happens at a different price than the one at which limits have been blocked.
Would the margin be recalculated at the time of modification?
Yes, it is recalculated and excess amount if any will be released or additional margin needed will be blocked if one changes the limit.
By what time position created in the Cover product should be squared off?
Position created under Cover product should be square off by 3:00, post that the same will be squared up by HDFC securities Limited.
Can position be created under Cover product against the collateral?
Yes. Collateral can be used to create position under Cover product.
Can one convert open derivatives Cover position into Margin position?
Yes. One can convert open derivatives cover position into Margin position before 3:00 PM after brining necessary addition fund/collateral. For converting the derivatives cover position one need to click on cover position tab under the order book section.
Can one partially convert open derivatives cover position?
Partial conversation of open derivatives cover position is not allowed. However partially pending second leg order can be converted.
Can one cancel second leg pending cover order at the time of conversion?
Yes, one can cancel the second leg pending derivatives cover order at the time of conversion. However if one does not wish to cancel the same, he/she needs to untick (do you wish to cancel the second leg pending order) the option available in the cover position panel. By default the said option will be also be ticked.
Till what time one can square off or convert the derivatives cover order?
Derivatives cover order needs to be squared off or converted to Margin position by 3:00 PM, otherwise the same will be squared off by HDFC Securities Limited.
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