Good Till Triggered: Now Made Better With Angel One

In the fast-paced world of trading, where every second counts, Angel One has enhanced the Good Till Triggered (GTT) orders feature. This feature empowers traders with unparalleled control over their trades, ensuring they never miss out on a profitable opportunity or suffer unnecessary losses. 

In this article, we’ll dive deep into what GTT orders are, how they work, and how you can leverage them to enhance your trading experience. 

What are GTT Orders?

GTT, or Good Till Triggered, orders are a type of advanced order that allows you to place buy or sell orders with a predefined trigger price. Unlike regular orders that expire at the end of the trading day, GTT orders remain active until they are triggered or manually cancelled by the user. 

This feature is especially useful in volatile markets where price fluctuations can happen rapidly, and constant monitoring is not always feasible.

Key Components of GTT Orders

• Trigger Price: The specified price at which the GTT order becomes active. This is the price input we take from you in ‘Take Entry’ and ‘Set SL/Target’ tabs 
• Limit Price: A predefined price limit within which the order should be executed. This is set based on the Market Protection percentage, which ensures traders don’t buy for more or sell for less than they intend and also their order gets executed. 
• Market Protection: This mechanism protects against extreme volatility by setting the Limit price of buy orders slightly above and sell orders slightly below the market price so that your orders get executed at the time of trigger.

How Do GTT Orders Work?

The beauty of GTT orders lies in their simplicity combined with powerful execution mechanics. Let’s explore how they function in different scenarios:

1. Taking Entry

When you’re ready to take a position in the market, whether it’s a buy or a sell, GTT orders provide a safety net by allowing you to set a specific price at which you want your order to be executed.

The securities are quoted as an example and not as a recommendation

Buy Scenario:

• Suppose you believe a stock will rise in value but want to buy it only if it reaches a specific price, say ₹800
• You can set a GTT order with ₹800 as the buy price.
• As soon as the stock hits ₹800, the market protection* system triggers a buy order with a limit price that’s 1% higher, i.e., ₹808.
• Since the market price is likely close to ₹800 when the trigger happens, your order is executed around this price, ensuring you get in at your desired level without overpaying.

Sell Scenario:

• Conversely, if you want to sell a stock only when it reaches ₹800, you set this as your trigger price.
• When the stock price hits ₹800, a sell order with a limit price of ₹792 (1% below the trigger price) is sent to the exchange.
• Again, since the market price would be near ₹800, the order is likely executed at or around  800, i.e, your target price.

*Market protection ensures that your buy or sell order is executed near the price you intended, offering a layer of protection against slippage – the difference between the expected price of a trade and the price at which the trade is actually executed.

For example, if you place an order to buy HDFC at ₹1500 with a Market Protection of 2%, your order will be executed within a range of ₹1500 to ₹1503. However, since HDFC is a high liquidity stock, the order will most likely be executed closer to ₹1500.

You can set the Market Protection percentage between 0.25% and 10%. This buffer helps protect against extreme price fluctuations, ensuring that your order is executed within a controlled price range rather than at a potentially less favourable market price.

2. Managing Positions

Once you’ve taken a position, managing it effectively becomes crucial. GTT orders make it easy to set stop losses and target prices, helping you lock in profits or minimise losses without needing to constantly monitor the market.

Setting Stop Loss:

• Imagine you bought a stock at ₹460 and want to protect your downside. For that you set a GTT order with a stop-loss trigger price at ₹456.45
• If the stock price falls to ₹456.45, the GTT order will send a sell order to the exchange with a limit price of ₹451.90 (1% below the trigger price).
• This ensures that your position is closed out near the ₹ 456.45 level, protecting you from further losses.

*The securities are quoted as an example and not as a recommendation

Setting Target:

• On the flip side, if you’re aiming to sell your stock when it reaches a higher price, say ₹504.5 you can set this as your GTT trigger price.
• When the stock hits ₹504.5, a sell order with a limit price of ₹499.45 (1% below the trigger price) is sent to the exchange.
• This mechanism allows you to lock in profits close to your target price.

These features give you the flexibility to step away from the market, knowing that your trades are protected and your strategy is being executed even in your absence.

3. Managing Existing Sell Positions

If you have an existing sell position, GTT orders provide the same level of control, allowing you to set both stop losses and targets with ease.

Stop Loss for Sell Positions:

• Suppose you’ve sold a stock at ₹850 and want to set a stop loss if the price rises to ₹892.5.
• You can set a GTT order to buy back the stock at this trigger price, with a limit buy order set at ₹901.42 (1% above the trigger price).
• This setup ensures that if the stock price moves against you, the order is executed around the trigger price, helping you cap your potential loss.

Target for Sell Positions:

• If your strategy involves buying back the stock when it drops to ₹807.5, you can set this as your GTT trigger price.
• When the stock hits this level, a buy order with a limit price of ₹815.15 (1% above the trigger price) is sent to the exchange.
• This ensures that your target is achieved and your position is closed out profitably.

Understanding Angel One’s GTT Orderpad

Understanding how the GTT Orderpad behaves in different scenarios is key to effectively managing your trades.

Case 1: No Existing Position

If you don’t have any existing position in the stock or contract:

• Use ‘Take Entry’ orderpad to take a position, allowing you to either buy or sell the stock or contract.
• By default, the ‘Buy’ option is selected, but you can choose to sell instead.
• To set stop loss and target on the order you have placed,  you have to take another position in the same stock/contract  and use the “Set SL/Target” option and set your desired SL and Target. .
• Make sure to select ‘Sell’ option if you are setting SL and Target for a  buy side position and ‘Buy’ option  if you are setting SL and Target for a  sell side position.

Case 2: Existing Position or Stock in Portfolio

If you already hold a position in the stock or it’s in your portfolio:

• The ‘Set SL/Target’ option is enabled by default, streamlining the process of managing your position.
• If you hold a buy position, the ‘Sell’ order type will be selected by default in the ‘Set SL/Target’ section.
• If you hold a sell position, the ‘Buy’ order type will be selected by default in the ‘Set SL/Target’ section.

This intuitive design ensures that the order pad adapts to your current trading situation, minimising errors and enhancing the trading experience.

Why Use GTT Orders?

GTT orders offer several compelling advantages for traders:

1. Precision and Control: With GTT orders, you can define exactly at what price you want to enter or exit a trade, minimising the impact of market volatility.
2. Convenience: GTT orders allow you to set up your trades and walk away, confident that your orders will be executed per your strategy, even if you’re not actively monitoring the market.
3. Risk Management: GTT orders help you manage risk more effectively by allowing you to set stop losses and targets. This ensures that you protect your capital and lock in profits.
4. Flexibility: Whether you’re managing a long or short position, GTT orders allow you to tailor your strategy to changing market conditions.
5. Error Reduction: The smart design of the GTT order pad reduces the likelihood of making errors, such as setting a buy order when you intend to sell.

Points to remember while placing GTT Orders

To maximise the benefits of GTT orders, keep the following tips in mind:

1. Set Realistic Trigger Prices: Ensure your trigger prices are based on sound analysis and align with your overall trading strategy. Avoid setting prices too close to current market levels, which could result in premature execution.
2. Consider Market Conditions: In highly volatile markets, the price might move quickly past your trigger, leading to partial fills. Be mindful of market conditions when setting your GTT orders.
3. Review Regularly: Although GTT orders allow you to step away from the market, it’s still wise to review your orders periodically, especially if there are significant market developments.
4. Combine with Alerts: Use price alerts in conjunction with GTT orders to stay informed about market movements that might affect your open orders.
5. Test with Small Positions: If you’re new to GTT orders, start with small positions to get comfortable with how they work before using them for larger trades.

Conclusion

By understanding how GTT orders work and utilising them effectively, you can enhance your trading experience, reduce risk, and potentially increase your profits. As markets continue to evolve, having such advanced tools at your disposal will be crucial for staying ahead of the curve.

With GTT orders, you no longer need to be glued to your screen, watching every tick of the market. Instead, you can set your strategy, let the system work for you, and focus on what matters most – making informed decisions that align with your financial goals.

*Investments in securities market are subject to market risks, read all the related documents carefully before investing

*This blog is for educational purposes only