MCX Order Types Explained — Limit, Market, SL and SL-M
The four order types on MCX, when to use each, and the stop loss mistake most beginners make on their first trade.
The 4 MCX Order Types at a Glance
Best for: Fast entry/exit during news events
Risk: Slippage — you may pay more than expected
Best for: Patient entries at support/resistance
Risk: May not execute if price never reaches your level
Best for: Rarely — advanced use only
Risk: If market gaps past your limit, order may not fill
Best for: All stop losses — this is the standard
Risk: Small slippage at execution, but WILL exit
Market Order — Speed Over Price
A market order executes immediately at the current best available price in the MCX order book. You get filled instantly, but you have no control over the exact price.
During thin liquidity (MCX mid-afternoon, or the first 5 minutes after MCX open), the spread between bid and ask can widen to ₹10–30 on Gold Mini. A market order in this window means you pay the full wide spread as an immediate loss. Always check the order book depth before using a market order.
Limit Order — Price Control, No Guarantee
A limit order executes only at your specified price or better. A buy limit order will only fill at your limit or lower; a sell limit will only fill at your limit or higher.
Limit orders are best for patient traders who have a clear entry level based on support/resistance analysis. They do not guarantee execution, so if you need to be in a trade, a limit order may leave you out.
SL vs SL-M — The Stop Loss You Are Probably Placing Wrong
This is the most consequential choice for risk management on MCX — and the one most beginners get wrong.
SL (Stop Loss Limit) — Has Execution Risk
An SL order requires two inputs: a Trigger Price and a Limit Price. When MCX price hits your trigger, a limit order is placed at your limit price.
SL-M (Stop Loss Market) — Guaranteed Exit
SL-M requires only a Trigger Price. When MCX hits your trigger, it fires a market order — which WILL fill at whatever price is available. You may get ₹10–30 worse than your trigger, but you WILL exit.
Always use SL-M for stop losses. The slippage is real but bounded. An unfilled SL limit in a gap scenario is unbounded.
How to Place an SL-M Stop Loss — Step by Step
- Open your broker trading terminal: Log in to Zerodha Kite, Angel One, or your broker's MCX terminal. Navigate to the MCX section and find the contract you are trading (e.g., Gold Mini June).
- Select SL-M as the order type: In the order window, change Order Type from "Market" to "SL-M" (Stop Loss Market). Do NOT use a plain "SL" (Stop Loss Limit) as a stop loss — if price gaps through your limit, the order will not execute.
- Enter the trigger price only: SL-M requires only a Trigger Price (no limit price). Enter the price at which you want to be stopped out. Example: if you bought Gold Mini at ₹91,500/10g, set trigger at ₹91,000 to limit loss to ₹500/10g (₹5,000 on 100g lot).
- Verify the order is on the correct side: If you are LONG (bought), your stop loss order must be a SELL SL-M. If you are SHORT (sold), your stop loss must be a BUY SL-M. This is the most common beginner error — placing an SL on the wrong side.
- Confirm the order and check order book: After placing, check your order book to confirm the SL-M shows as "Pending" with the correct trigger price. It will execute automatically when MCX price touches or crosses your trigger — you do not need to be watching the screen.
Cover Order and Bracket Order
| Order Type | What It Does | Margin Benefit | Best Used For |
|---|---|---|---|
| Cover Order (CO) | Entry + mandatory SL-M in one order. SL cannot be removed. | Lower margin (40–60% of normal, varies by broker) | Intraday trades where you want lower capital requirement with forced stop loss |
| Bracket Order (BO) | Entry + SL + Target price. When one triggers, the other cancels. | Lower margin, similar to CO | Intraday trades with defined entry, stop, and target — hands-free once placed |
Note: CO and BO availability varies by broker. Both are intraday-only and are auto-squared off before MCX close (usually 20–30 minutes before 11:30 PM). Not available in the last 20–30 minutes of the MCX session.
Frequently Asked Questions
What are the different order types on MCX?
MCX supports four main order types: (1) Market Order — executes immediately at the current best available price. Fast, but you may get a different price than expected during volatile periods. (2) Limit Order — executes only at your specified price or better. Safer for entry, but may not execute if price moves away. (3) SL (Stop Loss Limit) — triggers when price hits your trigger, then places a limit order. Has execution risk if price gaps. (4) SL-M (Stop Loss Market) — triggers when price hits your trigger, then places a market order for instant execution. Recommended for stop losses. Some brokers also offer Bracket Orders and Cover Orders which include automatic stop losses built in.
What is the difference between SL and SL-M order on MCX?
SL (Stop Loss Limit): Requires two prices — a trigger price and a limit price. When the trigger is hit, it places a limit order at your limit price. Problem: if the market gaps past your limit (e.g., news causes a sudden ₹200 move), your limit order may not get filled, leaving you still in a losing position. SL-M (Stop Loss Market): Requires only a trigger price. When the trigger is hit, it places a market order — which WILL execute at whatever the current market price is. You may get a slightly worse price than the trigger, but you WILL exit the position. For stop losses, always use SL-M over SL unless you have a very specific reason to use a limit.
When should I use a Market order vs Limit order on MCX?
Use Market order when: speed is more important than price — you want to enter/exit immediately, especially during fast-moving news events. Be aware that during thin liquidity (MCX mid-afternoon, or first/last few minutes), market orders can cause significant slippage. Use Limit order when: you have a specific entry price in mind and are willing to wait. Example: Gold Mini is at ₹91,800 and you only want to buy at ₹91,600 — place a buy limit at ₹91,600 and it executes only if price falls to that level. If price never reaches ₹91,600, the order stays open. Limit orders do not guarantee execution.
How do I set a stop loss on MCX Gold Mini?
Example: You buy 1 lot of MCX Gold Mini at ₹91,500/10g. Your maximum acceptable loss is ₹5,000 (₹500/10g on a 100g lot). Place a Sell SL-M order with trigger price at ₹91,000/10g. When MCX Gold falls to ₹91,000, the SL-M auto-triggers and sells your 1 lot at the next available market price (likely ₹91,000 ± ₹50 depending on liquidity). Important: the SL-M executes as a market order — during high-volatility periods, you may get filled slightly below ₹91,000. This is called slippage, and it is normal. Set your trigger a few points wider than your actual stop to account for it.
What is a Cover Order and Bracket Order on MCX?
Cover Order (CO): An entry order + mandatory stop loss in a single order. You enter a position and simultaneously set a stop loss. Cover Orders typically offer lower margin requirements (some brokers give 50% lower margin for CO) because the stop loss limits broker exposure. The stop cannot be removed — it is locked until you square off the position. Bracket Order (BO): Entry order + stop loss + target price, all in one. When either your stop loss OR target price is hit, the position closes and the other order cancels. BO and CO availability varies by broker — check your specific platform. Note: Cover and Bracket Orders typically do not work in the last 20–30 minutes before MCX close.
Can I place MCX orders after market hours?
Most brokers allow After Market Orders (AMO) on MCX — orders placed between 11:45 PM and 8:45 AM that execute at MCX open (9:00 AM). AMOs are useful if you know you want to trade the morning open but cannot be at your terminal at 9 AM. However, AMO prices can be significantly different from the previous night's close if global markets moved overnight (COMEX, NYMEX). Always set a limit AMO (not a market AMO) to avoid paying the wrong price at open.
Disclaimer: Order type availability and exact behaviour may vary by broker platform. Always check your specific broker's documentation. MCX commodity trading involves substantial risk of loss. This is educational content only and not investment advice.