How does the concept of SLT work?
Example Assume you take a sell position for the fresh order of 1000 shares at current market price of Rs 100/-. Simultaneously you also place the buy (cover order) of 1000 shares as Limit price Rs 112/-.SLTP Rs 108/-. The above example can be analyzed as follows Apart from a minimum margin on the fresh order value, the maximum loss amount would be blocked on the fresh order as difference between current market price and limit price. (112-100)*1000= Rs 12, 000/-. The fresh order is a market order which will get executed at the market price available at that point of time. If the order gets executed as Rs 101/- Revised amount of Rs 1000/-would be released. The cover order would remain in the ordered state. Current market price rises- Position is making a loss: Once the current market price starts rising and reaches Rs 108/-, the cover order would be triggered to a limit order with price Rs 112/-.The order would get executed at the best prices available up to the limit price of Rs. 112/-
