Trading Terms Explained

AutoTrader Web uses the same words the Indian stock exchanges use. If you are new to trading, or you have always traded through one broker’s app and never had to name these things, this page explains each word in plain English and points you at the screen where you will see it.

Nothing here is a suggestion about what or when to trade. It only explains what the words mean.

Orders, trades, positions and holdings

These four sound similar and mean different things. Getting them straight makes the whole Portfolio screen easier to read.

• An order is your request to buy or sell. You send it to your broker, who sends it to the exchange. It may complete, complete partly, or not complete at all.
• A trade is the part of an order that actually got done. One order can produce several trades if it completes in pieces.
• A position is something you are carrying in the market right now and can still close. It sits on the Positions tab.
• A holding is stock already in your demat account from an earlier day. It sits on the Holdings tab.

The short version: an order is the request, a trade is the result, a position is what you are still carrying, and a holding is what you already own.

One thing that surprises people: if you sell a holding today, that sale shows under Positions for the rest of the day. It is today’s activity, so it belongs with today’s positions.

Order types you can choose

The Trade screen offers four order types.

• MARKET — buy or sell at whatever price is available right now. It normally completes immediately, but you do not control the price you get.
• LIMIT — buy or sell only at your price or better. You control the price, but the order may never complete.
• STOP_LOSS — stays inactive until the price reaches your trigger price, then becomes a limit order.
• SL_MARKET — stays inactive until the price reaches your trigger price, then becomes a market order.

The Trigger Price field appears or hides on its own depending on which type you pick.

Trigger price and price are not the same thing

This is the single most common mix-up on the order form.

• Trigger price is the level that wakes the order up.
• Price is the level the order then tries to trade at.

Until the trigger price is reached, a stop-loss order does not try to buy or sell at all. It is waiting, not working. Once the trigger is hit, it becomes an ordinary limit or market order and behaves like one from that moment.

How the exchange matches orders, and why an order fills only partly

An exchange does not buy from you or sell to you. It matches your order against other traders’ orders on the other side. Better prices are matched first, and among orders at the same price the one sent earliest is matched first.

That means your order completes only when someone is on the other side at a price that works. Three results follow from this, and all three are normal:

• Filled partly. There was not enough quantity at your price. Part of your order traded and the rest stays pending. An order for 500 can come back as 180 done and 320 still waiting.
• Not filled at all. Your limit price never met anyone willing to take it.
• Filled at a different price than the one you saw. The last traded price is the price of a trade that has already happened. It is not a promise about the next one.

None of these mean something has gone wrong with your account or with the software.

Product type: intraday, delivery or normal

The product type tells your broker how long you intend to keep the trade.

• INTRADAY — closed the same day. If you do not close it, your broker closes it for you at the square-off time.
• DELIVERY — equity you intend to keep, which moves into your demat account.
• NORMAL — a derivatives position you intend to carry forward.

When you pick INTRADAY on the Trade screen, it shows you the automatic square-off time for that segment, so you know when the position will be closed for you.

Funds and margin

Margin is simply the money your broker counts as available for trading. The Margins tab shows it for every account at once.

• Total — everything in the account.
• Utilized — the part already tied up in open positions and pending orders.
• Available — what is left for new orders.

A pending order can hold margin even though nothing has traded yet. Cancel that order and the margin is released.

Day and net positions

The Positions tab can show your positions two ways, and the numbers differ for a reason.

• DAY — only today’s buying and selling. Useful for judging how a day went.
• NET — your actual current position, which is today plus anything carried from earlier days.

The profit and loss columns also measure two different things — M2M is today’s change, while PnL is your total since you opened the position. That distinction has its own explanation in Why AT PnL is different from M2M.

Squaring off

Squaring off means closing an open position by placing the opposite order — selling what you bought, or buying back what you sold. Once done, the position shows a net quantity of zero and its state becomes CLOSED.

On the Positions tab you can square off one position, several at once, or whole accounts. Sq-off (Custom) opens the Trade tab with the opposite order already filled in — side, symbol, exchange, product type and quantity — so you only set the order type and price.

Numbers that change, and where to check them

Some values move too often to list here, and getting them wrong costs real money: lot sizes, freeze limits, circuit limits, expiry dates, market timings and holidays, brokerage and taxes.

These are set by the exchanges and by your broker, and they change. Always confirm the current value with your broker rather than relying on a figure you read anywhere — including here.