Brokers with Bracket Order

A Bracket Order is an advance order type to help traders to limit the losses and increase chances of profitability. It's an order with an opposite-side order placed together (i.e. a buy order is bracketed by a high side sell limit order, and a low side sell stop order).

Bracket orders (BO) have a fixed stop-loss trailing order. To advance this further, some broker offers Bracket Order Trailing Stop-loss. This provides an ability to trail your stop-loss (dynamically). It means the stop-loss keeps moving based on the direction your stock or contract moves.

Bracket orders and cover orders are key risk management tools for a trader. A handful of stock brokers offer this order type to the traders.

Bracket Order Advantages

• Bracket Order has 3 orders placed from 1 screen - Entry, Target and Stop-loss order.
• Bracket Orders are valid only for intraday trading. All Bracket order positions are squared off by end of the trading day.
• The margin required for Bracket Order is half of normal MIS intraday trading orders.
• Bracket Orders are available only for Equity and Currency. They are not available for Commodity Trading at MCX.

Disadvantages of Bracket Order

• Not available for trading in Stock Options, Currency options, and Commodity options.
• In the case of flat rate brokers like Zerodha and Upstox, the brokerage charges in a bracket order are unpredictable. If the entry price of some of these shares is slightly different in order, the system creates separate target and stop-loss orders for each price.

Cover Order vs Bracket Order

• Each bracket order is a set of 3 orders (Entry, Target, and Stop-loss). Each cover order is a set of 2 orders (Entry and Stop-loss).
• Both offers equally higher leverage.

Read more about Bracket Order Explained with Example