Announcements

The Bombay Stock Exchange (BSE) has discontinued Stop Loss Market (SL-M) orders from 9th October 2023. 

What are Stop-Loss Orders?

As the name suggests, Stop-Loss is an order placed to limit your losses. A stop-loss can either be a buy order or a sell order and is the opposite of your open trade. For instance, if you have gone long on (bought shares of) Reliance at ₹2,000, the stop-loss is placed at a level below the purchase price, say ₹1,950 or ₹1,900. And if you have gone short (sold), say Nifty Futures at 18,000, the stop-loss is placed above your selling price, could be 18,100.

How will this impact traders?

• 🔹 You won’t be able to place any Stop-Loss Market Orders in BSE Equities, Futures, Options, Currencies  
• 🔹 Cover Orders (CO) where the second leg is a Stop-Loss Market Order will also no longer be accepted
• 🔹 You can continue placing Stop-Loss Limit Orders instead

Why is BSE taking this step?

To resolve the occurrences of frequent freak trades, BSE has decided to discontinue SL-M orders.
A "freak trade" refers to an unusual or unexpected trade that deviates significantly from the typical market price movements.  It can cause confusion and panic in the market, affecting other traders and the overall stability of the market.

Positive responses from the trading community:

Market experts and professionals have welcomed this decision, stating that it will be beneficial for small and retail traders. The discontinuation is also in line with National Stock Exchange (NSE) decision to discontinue SL-M orders in September 2021. Traders are encouraged to use Stop Loss Limit (SL-L) orders as an alternative to SL-M orders. An SL-L order only executes at a specified price within a given range, allowing traders greater control and precision while trading.