COVER ORDER - NIFTY OPTIONS - FAQ’s

What is Cover Product?

Cover Product is an advanced intraday order type where you take position at Market/Limit price
through your first order and at the same time place a second stop loss order to limit downside.

What are the benefits of Cover Order over other order type Product?
 Limiting Losses: While placing a Cover Order, you have to compulsorily place a Stop Loss
Order within a specific range from where you are entering the stock/contract and cannot
cancel such order. This way you are also limiting your losses, if any. The SL order can be
modified, but within the range itself.
 Higher Leverage: The compulsory SL limits your losses, reducing the risk and hence we can
offer much higher intraday leverage compared to orders placed using NRML. You can avail
upto 33 times margin on your Nifty Option sell position and 1.5 times margin on your Nifty
Option buy position. No leverage in Options Buy on Expiry day.

How does it function?

Two simultaneous orders have to be placed when CO order type is chosen
1. Market/Limit order for position creation
2. Stop loss order for defining maximum loss
You can Exit the position any time during the day till 3.10 pm by just clicking on Exit Button.
If the price breaches the stop loss trigger price the system will square-off the CO product order.
System will also square off all CO Product orders post 3.10 pm by converting SL Trigger price to
Market.

Can Stop Loss order be modified once the first leg is executed?
Stop Loss Trigger Price can be modified. Modification is allowed within a range of 40% from the
Premium amount. For example, if an Option is bought/sold @ Rs 100, s/l has to be within Rs 60 in
case of Options Buy and within Rs 140 in case of Options sell

Can Stop Loss order be cancelled?

No, Stop Loss Order cannot be cancelled.

How can Cover Order be entered post login on EXE?

 Click on the scrip in your Market Watch and press (Shift + F1 for buy) or (Shift + F2 for sell) to
activate the CO Product order form.
 Put desired quantity and enter SL Trigger. SL Trigger Price should be between range as
specified in 'Trigger Price Range'.
 Click on Submit button twice to place order.
 Along with normal order you placed, you can check the order status of Co Product scrip by
Pressing F3 which will activate Order Book
 Stop Loss Trigger Price can be modified. It can be done by pressing F3 and then Shift F1.
Note:
 Clients can't modify the quantity of shares in the Stop Loss order.
 Currently Cover option facility is available only on Xtreme Trader only.
Can client take exposure against collateral for placing a Cover Order?
Yes, the client can take exposure against collateral for placing a cover order

Would the client be charged for this facility?

There wouldn’t be any additional charges for this facility

Till what time can the order be placed under Cover Order?
The orders have to be placed before 3:10 PM

How many Option contracts are available for trading on Cover Order (CO)?
Currently you can trade in Nifty current month expiry only, it may vary from time to time. Allowed in
1 ATM, I ITM and 1 OTM strike prices of 100 points interval i.e. If Nifty is quoting around 8500 then
8400, 8500 and 8600 strike prices will be open in Cover order for that day

Can Edelweiss Broking Ltd. increase margin requirements?

Yes, Edelweiss Broking Ltd. can make changes in the margin from time to time

Can Edelweiss Broking Ltd. disable this facility for a day or two due to adverse market conditions?
Yes, Edelweiss Broking Ltd. can disable this facility in case of adverse market conditions.

Can a customer buy/sell Stock and Index Futures in MIS Product who has open position in Cover
Order?
Yes, the customer can buy/sell in MIS even if he has an open position in Cover Order. However this
order will be treated as an independent order and cannot be used to square off the cover order.

Can a customer trade in NRML Product if he has open positions in Cover Order?
Yes, the customer can trade in NRML product. However his position in NRML will be treated as
independent position and cannot be set off against Cover Order position.

Who can avail this Cover Order product?

This facility is available for all the clients of Edelweiss Broking Ltd – (Retail Broking)

Will this facility be offered to all new customers?

Yes, the facility will be offered to all the existing and new clients who trade with Edelweiss Broking
Ltd.