The trigger price is the price at which the exchange activates your Stop-Loss order. When you place an SL order it goes to the exchange straight away and waits there in the exchange's stop-loss queue; until the last traded price touches your trigger price, it stays inactive and doesn't enter the regular order book.
How does trigger price work?
Rupeezy offers two Stop-Loss varieties:
- SL (Stop-Loss Limit) — has both a trigger price and a limit price. Once the last traded price touches your trigger price, the exchange activates it as a Limit order at your limit price.
- SL-M (Stop-Loss Market) — has only a trigger price. Once touched, the exchange activates it as a Market order, so it executes at whatever price is available.
Trigger price vs. limit price in an SL order
For an SL order, the trigger price and limit price are two different values, and the exchange requires a specific relationship between them:
- On a BUY SL order, your limit price must be greater than or equal to the trigger price.
- On a SELL SL order, your limit price must be lesser than or equal to the trigger price.
For example, if you hold a stock and want to cut your loss once it falls to ₹98, you'd place a SELL SL order with trigger price ₹98 and a limit price at or below ₹98 (say ₹97.50, to give it room to fill). When the price touches ₹98, the exchange releases your Limit order of ₹97.50 into the market.
Things to keep in mind
- Touching the trigger price only activates the order at the exchange — it doesn't guarantee execution. An SL (Limit) order can still miss its fill if the price moves past your limit price too fast; an SL-M order will execute, but possibly at a worse price than you expected in a fast-moving market.
- This is the same trigger-price concept GTT orders use for their Stop Loss and Target legs.