Glossary
What is Bracket Order / Cover Order? Meaning, Example & Why It Matters
Intraday order types that attach a compulsory stop-loss (cover order) or both stop-loss and target (bracket order).
A cover order is an intraday order placed together with a compulsory stop-loss. Because your risk is capped by the stop-loss, brokers may require less margin for it. A bracket order goes a step further by attaching both a stop-loss and a profit target to your entry, so the position exits automatically at either level.
Why Bracket Order / Cover Order matters to you
These order types help traders manage risk automatically. Once placed, your exit plan is fixed, reducing the temptation to hold a losing trade longer than planned. They are designed for intraday use, so positions are squared off by the end of the day if neither level is hit.
Availability varies. After peak margin rules reduced intraday leverage, several brokers discontinued or changed bracket orders, while cover orders are still offered by some. Charges are usually the same as regular intraday orders, but each leg that executes counts as an order for brokerage.
Practical tip: check whether your broker supports these order types and how they behave in fast markets. Like any stop-loss, the exit price is not guaranteed if prices gap, so size your position based on a realistic worst case.
Example: Illustrative only: in a bracket order, you buy at ₹200 with a target of ₹206 and a stop-loss of ₹197. If the price reaches ₹206 first, you exit with a profit; if it falls to ₹197 first, you exit with a limited loss, both before charges.
See it in rupees: every charge and tax on a real trade, at every broker. Open the brokerage calculator
Related terms
- GlossaryStop-Loss Order
An order that triggers a buy or sell once the price reaches a set level, used to limit losses on a position.
- GlossaryIntraday Trading
Buying and selling the same security within one trading day, so no shares are delivered to your demat account.
- GlossaryGTT Order (Good Till Triggered)
A standing instruction that places an order automatically when the price reaches your trigger, valid for an extended period.
- GlossaryPeak Margin
A rule requiring traders to hold sufficient margin at random intraday snapshots, not just at the end of the day.
Frequently asked questions
What is the difference between a bracket and a cover order?
A cover order includes only a compulsory stop-loss, while a bracket order includes both a stop-loss and a target.
Can I hold a bracket order overnight?
No, these are intraday order types and are squared off before market close.
Why did some brokers stop offering bracket orders?
Changes in margin rules and risk policies led some brokers to discontinue or modify them.