Bracket Order

A bracket order (BO) is a single order that bundles three legs — the entry, a profit-booking target order, and a stop-loss — so the position is “bracketed” from the moment it fills, with the two exit legs working as one-cancels-other: whichever is hit first executes and the other is cancelled automatically. Its simpler cousin, the cover order (CO), pairs an entry with only a compulsory stop-loss leg.

Both are intraday products in India: positions under them are squared off by the broker’s cutoff if neither exit triggers. Because the stop is mandatory and system-enforced, brokers historically offered margin benefits on these order types. Availability varies — several Indian brokers withdrew or reworked bracket and cover orders after the margin-rule changes of recent years, so check whether your broker currently supports them before building a workflow around either.

Example

A trader buys 150 shares of HDFCBANK at ₹1,700 via a bracket order with a ₹15 target and ₹8 stop. The moment the entry fills, a sell limit at ₹1,715 and a sell stop at ₹1,692 go live together. If price touches ₹1,715, profit of about 15 × 150 = ₹2,250 is booked and the stop leg vanishes; if ₹1,692 trades first, the loss is capped near 8 × 150 = ₹1,200. Hypothetical, before charges.

Why it matters

Bracket-style exits are the manual trader’s taste of systematic discipline — exits decided before emotion arrives. Algo platforms generalize the idea: OCO stop-and-target management in software works across brokers and product types, without depending on any one broker’s BO support.

In INDfolio AI, stop and target legs are managed by the platform on every supported broker — see Zerodha and the other broker pages.