What is Cover Order and Bracket Order?
Channel: Shoonya by Finvasia
Date: 01/03/2023

A cover order includes a mandatory stop-loss order in addition to the initial order. A trader enters a buy/sell order which can be a limit or market order in a cover order.  The mandatory stop-loss is in a certain range and is irrevocable. Placing a stop-loss order reduces risks. In the same trading session, all cover orders are immediately squared off and are not carried over to the following day.

A bracket order is a combination of three different order categories. Initial order plus stop-loss order plus goal order is a bracket order. They enable traders to place three orders with a single click. As the name suggests, these orders help to ‘bracket’ an order by deciding the trade stop-loss levels and the target exit for the same trade. It is an advanced intraday trading order. A trader opens a new position and places stop-loss and exit orders.

Target order is not accessible in cover order, which is one way that bracket and cover orders differ.

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