Trading Terminal: Order Placement and Management

In the last few chapters, we learned various things about the stock markets. The exchanges, indexes and even the market regulators. Now, let's explore the practical side of executing orders in the stock market. 

Prior to 1994, the era of electronic trading, you could only place an order via phone with the stock broker. You must have watched this in movies and documentaries related to the stock market. 

But now, there are three new ways to execute a stock market transaction:

• Contact your stock broker through a central support number and request to buy or sell a stock, known as "Call & Trade."
• Utilise a web application for trading.
• Use a mobile application for trading.

No matter which method you go for, it's like opening a door to the stock market. Imagine this door as your entry point, allowing you to do all sorts of things like buying and selling shares, keeping an eye on your profits and losses, tracking market trends, handling your funds, checking out stock charts, and using various trading tools.

This entry point is commonly referred to as a 'Trading Terminal’, like the Angel One platform. In this chapter, we'll understand the features and workings of a trading terminal. 

Investing with Trading Platforms

Okay, let’s imagine you’re investing in your browser. You want to dive into trading using Angel One. To get started, just go to angelone.com in your web browser. Of course, you must have a trading account with Angel One to access the trading terminal. Then follow these steps:

• Log in with Trading Terminal

So, let's talk about the login terminal, which is crucial because it holds all your information about securities and funds. Now, SEBI is on top of things, ensuring the right regulations are in place to keep your trading terminal safe.

Brokers have set up a solid login process to get into your account. First, you enter your broker-provided user ID (for Angel One, you can log in with your mobile number or client ID). 

After entering the user ID/ Registered Phone Number and hitting the proceed button, you'll be asked for an external TOTP (Time-based One-Time Password). 

Here's the interesting part –  once you enter your mobile number/client ID, the OTP will last for only 30 seconds. These OTPs are like secret codes that are sent from the Angel One servers to maintain the security of your demat accounts. 

After you punch in the OTP, you've to enter your PIN to ensure a second layer of security. Make sure you’re careful about the login PIN – it's not just a formality; it's about keeping your trading account safe and sound. 

Once you enter the login PIN, you’re in!

• Creating Watchlist

Alright, so once you've smoothly logged into your Angel One platform, it's time to set up your personalised watchlist. Think of it as a fresh menu canvas waiting for your selections. You can choose and load up the stocks that pique your interest onto this watchlist. (The highlighted box is the watchlist. Also, this is the home screen you’ll see when you log in with Angel One)

Once you've populated it with your preferred stocks, you can navigate, transact, and get the latest insights. 

So, let’s add your desired stock to our watchlist and check out the fundamentals of the stock before buying it. As you can see in the screenshot below, there is also a direct buying and selling option for easy access during bulk trading.

• Placing an Order

Alright, let's imagine you're using Angel One to buy a share of a stock, named XYZ.

Firstly, locate the stock XYZ on your Angel One trading terminal. Hover over it and click on the Buy icon (B). This will open up the buy order form.

Now, at the top of the order form, you'll find the exchange dropdown. By default, it might be set to NSE, but you can choose BSE if you prefer.

Moving on to the 'order type' section, you have four options in the dropdown:

• Limit: If you have a specific price in mind that you're willing to pay for XYZ. For instance, if the current price is ₹150, you might set a limit of ₹149.
• Market: If you want to buy XYZ at the current market price, irrespective of small fluctuations. This is useful when you want the transaction to happen quickly.
• SL (Stop Loss): To protect yourself from potential losses, set a trigger price (say, ₹155) and a stop-loss price (e.g., ₹150). If XYZ drops below ₹150, your order will activate, limiting your loss.
• SL-Market (Stop Loss Market): Similar to SL but triggers a market order once the trigger price is hit.
• GTT: In GTT, you'll see your asset, action, quantity, expiry date, trigger price, investment type, limit price, and options to cancel or edit the order. Clicking on an order reveals more details and a price action chart.

Now, let's say you want to buy just one share of XYZ. So, in the quantity box, enter 1. Skip trigger price and disclosed quantity for now.

• Choose the product type:

• Delivery: If you plan to hold onto XYZ for a longer period, like days, months, or years. This ensures the share goes into your Demat account.
• Intraday: If you're into day trading and want to use margins.

Once you've filled in these details, hit submit, and your order is sent to the exchange through Angel One. A unique order ticket number is assigned.

Remember, if you chose a limit order at ₹149, your order will only execute if the price drops to that level. On the other hand, a market order will go through at the current market price.

As soon as the conditions are met, assuming sellers are willing, your order gets executed, and congratulations, you now own one share of XYZ! 

• Open Orders:

When you want to keep tabs on your active orders, head to the "Open Orders" section. Here, you'll find a list of all your pending orders with details like the asset name, additional specifics for options, action (buy/sell), lots traded, order price, and current status.

You can filter these orders based on the asset class – Cash, F&O, Currency, Commodity, and Indices. Plus, there's a nifty feature allowing you to filter orders by expiry date.

If you click on "Order History" under Open Orders, you'll get a rundown of all your past orders, including rejected ones. It shows key details like order type, lots traded, status, execution price, and the latest traded price.

• Baskets:

Now, let's talk about baskets – a handy way to organise your orders.

Creating a basket is a breeze. Click on "CREATE NEW BASKET," add your desired assets, specify order details, and save the basket. You can create up to 50 baskets with 20 orders each.

To place a basket order, go to the "Baskets" section, select the basket, and hit "PLACE BASKET." Check your margin and charges before confirming.

Need to modify or delete an order in a basket? No problem. Click on the specific order in the basket, choose 'DELETE' or 'MODIFY,' and follow the prompts.

Want a duplicate of a basket? Easy. Find it, click on the copy icon, choose a new name, and voila – a cloned basket.

You can even add orders to a basket directly from your Watchlist. Just click on a scrip, select 'ADD TO BASKET,' and you're set.

How Trading Platforms Place Orders: Bid and Offer Price

Buying and selling stocks involves understanding bid and offer prices. Imagine you're at a stock market looking to buy or sell shares. The seller sets the "Offer Price," which is the price they think is fair. This price is highlighted in red. Let’s create a hypothetical example to understand easily.

Suppose these are the top 5 offer prices:

Sl No	Offer Price	Offer Quantity	Number of Sellers
01	129.50	3	2
02	129.55	6	2
03	129.70	8	3
04	129.80	15	1
05	129.85	4	1

For instance, the first offer price is ₹129.50. At this moment, it's the best price, and there are only three shares available, offered by two sellers. The second-best price is ₹129.55, with six shares offered by two sellers, and so on.

Higher prices have lower priority. The stock exchange prioritises sellers offering shares at the lowest prices. If you want to buy 10 shares at ₹129.50, you can only get two, as only two are offered at that price. Alternatively, a market order could get you 10 shares at different prices.

On the flip side, if you want to sell, you set the "Bid Price," the price at which you expect buyers to pay. This price is highlighted in blue.

Here are the top 5 bid prices:

Sl No	Bid Price	Bid Quantity	Number of Buyers
01	129.45	12	5
02	129.40	8	1
03	129.35	3	2
04	129.30	10	1
05	129.25	20	1

The best bid price is ₹129.45, where you can sell ten shares since there are five buyers at that price.

For example, if you sell 20 shares at market price, the execution could go like this:

• 10 shares sold @ ₹129.45
• Eight shares sold @ ₹129.40
• One share sold @ ₹129.35
• One share sold @ ₹129.30

So, bid and offer prices provide insights into the top 5 prices at which buyers and sellers are ready to make deals. Remember, this is just a glimpse; you can delve deeper into the top 20 bids and offers with the 20-depth window. Understanding these dynamics is crucial for traders, especially if you're into intraday trading. 

Wrapping Up

The trading terminal acts as your access point to the markets, offering various features that are valuable for traders. As you go through the learning modules, you'll become familiar with setting up a market watch, conducting stock transactions (buying and selling), and navigating the order and trade book. Additionally, you'll gain an understanding of the market depth window.

It's essential to note that the trading terminal undergoes continuous improvements to enhance the user experience. While the user interface may evolve over the years, fundamental concepts like the order book, trade book, stop-loss (SL), limit order, etc., will remain consistent.

As we wrap up this chapter, keep in mind that even if the interface changes down the road, the core principles of trading on the terminal will stay the same. Happy trading!