Yes, Bracket Orders (BO) are typically only for intraday trading. They are designed to help traders manage risk efficiently by combining entry, stop-loss, and target orders in a single order. Since intraday trades are automatically squared off by the end of the trading session, Bracket Orders do not carry over to the next day.
Why Are Bracket Orders Only for Intraday?
- Risk Management:
- Bracket Orders provide high leverage, only for intraday positions under SEBI regulations.
- Auto Square-Off:
- Since intraday positions are squared off before the market closes, BOs automatically exit if the target or stop-loss is not hit.
- Margin Requirements:
- BOs offer higher margin benefits compared to delivery trades.
- SEBI's peak margin rules restrict such leveraged positions for overnight trades.
- Execution Complexity:
- BOs involve three linked orders (entry, target, stop-loss).
- Keeping them open overnight increases the risk of gaps and slippages, making them unsuitable for positional trading.
Alternative for Carry-Forward Trades
If you want a similar risk management setup for positional trading, you can use:
- Good Till Triggered (GTT) Orders: Set stop-loss and target for delivery trades.
- Cover Orders (CO): If your broker supports it, COs allow higher leverage with stop-loss but no target order.
- Manually Placing SL & Target: You can place separate stop-loss and target orders for your delivery trades.
