Trading on WebNotes

AMO (After Market Order) on Zerodha

Mon, 11 May 2026 00:00:00 +0000

An AMO (After Market Order) is a feature on Kite, Zerodha’s trading platform, that allows traders to place buy or sell orders outside normal market hours. The order is stored on Zerodha’s servers and submitted to the exchange at the start of the next trading session. This facility enables traders who cannot monitor markets during live hours to set orders in advance, including in the evenings, early mornings, or on weekends.

AMO is not an exchange-level order type. It is a Zerodha platform-level feature. When the designated submission window opens, Kite routes AMO orders to the National Stock Exchange or Bombay Stock Exchange as standard limit, market, SL, or SL-M orders.

Auction market on NSE and BSE

Mon, 11 May 2026 00:00:00 +0000

The auction market on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) is a special trading session conducted by the exchange’s clearing corporation to resolve cases where sellers in the normal equity settlement fail to deliver the shares they are obligated to deliver. This non-delivery, called a short delivery, arises when a seller who executed a trade on the exchange does not place the required shares into the clearing system by the settlement deadline. To protect the buyer, the exchange runs an auction to procure the undelivered shares from willing sellers.

Bank account verification (penny drop) on Zerodha

Mon, 11 May 2026 00:00:00 +0000

Overview

The penny drop method is a bank account verification technique widely used by Indian financial services firms, including Zerodha, to confirm that an account number provided by a client actually belongs to that client and that the account is active and capable of receiving electronic transfers. The method involves transferring a small amount (typically one rupee) to the client’s declared bank account. The transfer response from the bank confirms the account’s validity and, crucially, returns the account holder name as registered with the bank, which is then matched against the name on the client’s KYC documents.

Basket order on Kite

Mon, 11 May 2026 00:00:00 +0000

A basket order on Kite, Zerodha’s trading platform, is a facility that allows traders and investors to create a list of multiple orders across different instruments and submit them all at once with a single action. Each individual order in the basket is a standard Kite order, it can be a market, limit, or SL order with any applicable product code, but the basket feature enables batch submission that saves time for multi-instrument strategies.

Basket orders are particularly useful for portfolio rebalancing, index constituent trading, strategy deployment, and managing multiple correlated positions. The feature is accessible through the Kite web interface and the Kite mobile app.

Bracket order (BO), legacy Zerodha feature

Mon, 11 May 2026 00:00:00 +0000

A bracket order (BO) was an advanced intraday order type formerly available on Kite, Zerodha’s trading platform. It enabled a trader to simultaneously place three linked legs: an entry order, a profit target, and a stop-loss with an optional trailing feature. The bracket order was discontinued by Zerodha in October 2020 following changes to SEBI margin norms and was not restored thereafter.

This article documents the bracket order for historical reference and for the benefit of traders who encounter it in older documentation, platform guides, or community discussions.

Bracket order discontinuation (historical)

Mon, 11 May 2026 00:00:00 +0000

Overview

A bracket order (BO) was an advanced intraday order type offered by Zerodha and several other Indian brokers that combined three linked orders into a single instruction: an entry order, a stop-loss order, and a target order. The three-legged structure allowed a trader to define the entry price, the maximum loss (stop-loss), and the desired profit exit (target) in a single order placement, with the bracket structure ensuring that once any one of the three legs executed (stop-loss or target), the remaining leg was automatically cancelled.

BTST (Buy Today Sell Tomorrow) on Zerodha

Mon, 11 May 2026 00:00:00 +0000

BTST (Buy Today Sell Tomorrow) is a trading strategy in which an investor buys equity shares on one day and sells them on the next trading day, before the purchased shares are credited to their demat account through the normal settlement cycle. On Zerodha, BTST trades are executed using the CNC product code for both the buy and the subsequent sell order.

Under India’s T+1 settlement framework, shares bought on Day 0 (T) are credited to the buyer’s demat account on Day 1 (T+1). BTST involves selling these shares on Day 1 before the credit arrives, technically selling shares that are in the pipeline of settlement rather than in the demat account. This creates a specific settlement risk called short delivery.

CDS/MCX product circle on Zerodha

Mon, 11 May 2026 00:00:00 +0000

Overview

Indian financial markets are divided into distinct regulatory segments, each governed by its own set of SEBI and exchange regulations, and each requiring specific regulatory approvals for both brokers and clients. At Zerodha, the “product circle” refers to the set of market segments a client’s account is enabled to trade in. By default, a Zerodha account is enabled for equity trading on the NSE and BSE – both the cash (equity delivery) and derivatives (equity futures and options) segments. Additional segments, specifically currency derivatives (traded on the NSE’s CDS segment and the BSE’s CD segment) and commodity derivatives (traded on the Multi Commodity Exchange, MCX), require separate activation.

CNC product code on Zerodha

Mon, 11 May 2026 00:00:00 +0000

CNC (Cash and Carry) is a product code on Kite, Zerodha’s trading platform, that designates an equity trade as a delivery transaction. When a trader selects CNC for a buy order, Zerodha blocks the full transaction value from the available cash balance (no leverage), and upon execution, the shares are credited to the trader’s demat account on T+1 settlement. When CNC is selected for a sell order, shares are deducted from the demat account and the proceeds are credited after settlement.

Cover order (CO) on Zerodha

Mon, 11 May 2026 00:00:00 +0000

A cover order (CO) is a special intraday order type on Kite, Zerodha’s trading platform, that combines an entry order with a compulsory stop-loss order placed simultaneously. The mandatory stop-loss is placed as an SL-M (Stop Loss Market) order at the time the entry order is submitted. Because the maximum possible loss on the position is pre-defined by the stop-loss range, the exchange and broker can offer higher leverage (lower margin requirement) for cover orders compared with standard MIS intraday orders.

Disclosed quantity orders

Mon, 11 May 2026 00:00:00 +0000

A disclosed quantity order is a limit order in which the trader specifies that only a fraction of the total order quantity should be visible in the public order book (the market depth) at any given time. The remaining quantity, the undisclosed portion, is held by the exchange and released into the book as successive tranches of the disclosed quantity are filled. The exchange matching engine treats the full order quantity as active, but only market participants see the disclosed portion.

eMandate on Zerodha (UPI and net-banking)

Mon, 11 May 2026 00:00:00 +0000

Overview

An eMandate is a digital authorisation given by a bank account holder to a financial services provider, authorising the provider to debit the account for a recurring payment up to a specified limit, on a defined schedule, for a defined purpose. On Zerodha, eMandates are primarily used for Systematic Investment Plan (SIP) contributions through the Coin mutual fund platform, enabling automatic monthly debits from the client’s bank account to fund ongoing mutual fund investments without requiring manual intervention for each instalment.

Family declaration on Console

Mon, 11 May 2026 00:00:00 +0000

Overview

The family declaration feature on Zerodha’s Console platform allows multiple Zerodha accounts belonging to members of the same family to be linked under a single declarant account. Once linked, the family members’ portfolios, profit and loss statements, and tax reports can be viewed in an aggregated format from the primary (declarant) account, while each member’s account remains legally and operationally independent.

The feature is designed for households where multiple family members – spouses, parents and children, siblings – each maintain individual Zerodha accounts but where the primary investor or financial planner in the family wants consolidated visibility over the household’s overall investment position without the administrative burden of logging into each account separately.

GTT (Good Till Triggered) order on Zerodha

Mon, 11 May 2026 00:00:00 +0000

The GTT (Good Till Triggered) is a proprietary order management feature introduced by Zerodha that allows traders and investors to set conditional buy or sell orders that remain active for up to one year, independent of daily market sessions. Unlike standard orders placed on Kite, which are cancelled at the end of each trading day, a GTT order persists in Zerodha’s own infrastructure until a user-defined price condition is met, at which point Zerodha submits a regular limit order to the exchange on the trader’s behalf.

Iceberg order on Kite

Mon, 11 May 2026 00:00:00 +0000

An iceberg order is an order type on Kite, Zerodha’s trading platform, that allows a trader to place a large total quantity while displaying only a small fraction of that quantity, the tranche size, in the public order book at any given time. As each visible tranche is filled, the next tranche is automatically submitted to the exchange, continuing until the entire order quantity is executed or cancelled.

The name derives from the analogy of an iceberg: a small portion is visible above the surface (the order book), while the much larger bulk remains hidden below. Iceberg orders are also known as reserve orders in international market terminology and are closely related to the disclosed quantity feature on Kite.

Idle funds policy on Zerodha

Mon, 11 May 2026 00:00:00 +0000

Overview

Zerodha’s idle funds policy is the set of operational procedures by which the broker identifies and returns uninvested client cash to the client’s linked bank account after it has remained inactive in the trading account for a defined period. The policy implements SEBI’s client funds segregation framework, which requires brokers to maintain strict separation between client funds and broker funds, and which mandates the return of idle client balances to prevent brokers from using client cash for their own purposes.

Kill switch on Kite (F&O cooling-off)

Mon, 11 May 2026 00:00:00 +0000

Overview

The kill switch on Zerodha’s Kite platform is a voluntary self-exclusion feature that allows a trader to suspend all futures and options (F&O) order placement for a defined cooling-off period. When activated, the kill switch prevents the account from entering new F&O positions until the cooling-off window expires. The feature is designed to interrupt loss-chasing behaviour – the documented tendency of traders who have suffered significant losses to increase their risk-taking in an attempt to recover, often compounding losses further.

Limit order on Kite

Mon, 11 May 2026 00:00:00 +0000

A limit order is an instruction to a stockbroker to buy or sell a financial instrument at a specified price or better. On Kite, the trading platform operated by Zerodha, a limit order is placed by selecting “LIMIT” in the order type dropdown and entering the desired price in the price field. Unlike a market order, a limit order will not execute unless the market price reaches the trader’s specified level; it therefore guarantees price but does not guarantee execution.

Liquid fund margin (Liquidcase) on Zerodha

Mon, 11 May 2026 00:00:00 +0000

Overview

Liquidcase is Zerodha’s integrated facility that allows traders to invest funds sitting idle in their trading account into liquid mutual funds through Coin, Zerodha’s direct mutual fund platform, and simultaneously pledge those liquid fund units as margin collateral for futures and options (F&O) trading on Kite. The facility addresses a structural inefficiency in retail F&O trading: cash held as margin in a trading account typically earns no return, while the same amount invested in a liquid mutual fund earns money market returns while remaining available as collateral.

Margin pledge mechanics on Zerodha

Mon, 11 May 2026 00:00:00 +0000

Overview

The margin pledge framework, introduced by SEBI through its September 2020 circular, fundamentally changed how retail and institutional clients use securities as collateral for futures and options (F&O) trading in India. On Zerodha, margin pledging allows a client to pledge eligible equity holdings held in their demat account as collateral margin, reducing or eliminating the need to transfer cash to meet F&O margin requirements.

Before the 2020 framework, brokers commonly handled securities-as-margin by transferring client shares to pool accounts or directly to the clearing corporation. The new pledge mechanism keeps securities in the client’s demat account while creating a formal charge over them through the CDSL or NSDL depository infrastructure. This distinction protects client ownership rights and reduces systemic risk arising from broker commingling of client assets.

Market order on Kite

Mon, 11 May 2026 00:00:00 +0000

A market order is an instruction to a stockbroker or trading platform to buy or sell a financial instrument immediately at the best price currently available in the market. On Kite, the trading platform operated by Zerodha, a market order is placed by selecting “MARKET” in the order type dropdown. The exchange matching engine fills the order at whatever bid (for a sell) or ask (for a buy) is sitting at the top of the order book at the moment the order reaches the exchange.

MIS product code on Zerodha

Mon, 11 May 2026 00:00:00 +0000

MIS (Margin Intraday Squareoff) is a product code on Kite, Zerodha’s trading platform, that designates an order as an intraday trade. Positions opened under MIS must be closed within the same trading session. If a MIS position remains open at approximately 3:20 PM, Zerodha automatically squares it off (closes it) at the prevailing market price. In exchange for the intraday restriction, Zerodha offers additional leverage over the CNC equity delivery product.

MIS is available for equity (cash segment), equity derivatives (F&O), currency derivatives, and commodity derivatives. It is the primary product code for active intraday traders on Kite.

MTF product code on Zerodha

Mon, 11 May 2026 00:00:00 +0000

MTF (Margin Trading Facility) is a product code on Kite, Zerodha’s trading platform, that enables investors to buy eligible equity shares by paying only a portion of the total transaction value upfront. The remainder is funded by Zerodha as a loan, on which interest accrues daily. The purchased shares serve as collateral for the loan and are held in the investor’s demat account in a pledged state until the MTF position is fully paid for or sold.

Mutual fund pledging on Zerodha

Mon, 11 May 2026 00:00:00 +0000

Overview

Zerodha allows clients to pledge mutual fund units held in demat form – typically units purchased through Coin, Zerodha’s direct mutual fund platform – as collateral margin for futures and options (F&O) trading on Kite. This facility extends the margin pledge framework to mutual fund units, enabling clients to earn returns on their invested corpus while simultaneously using that corpus as collateral against F&O margin requirements.

Mutual fund pledging is distinct from the Liquidcase facility (which specifically targets liquid fund units as near-cash collateral) in that it covers a broader range of fund categories including equity-oriented funds, debt funds, and balanced funds. The haircuts and collateral margin treatment vary significantly by fund category, and equity mutual funds in particular are treated as non-cash collateral rather than cash-equivalent collateral.

Nominee process at Zerodha

Mon, 11 May 2026 00:00:00 +0000

Overview

Nomination is a legal facility that allows the holder of a financial account to designate one or more individuals who will receive the assets held in that account upon the account holder’s death. At Zerodha, nomination is available for three distinct account types that a client typically holds: the trading account (broker account), the demat account (held with CDSL or NSDL), and mutual fund holdings (managed through Coin). Each of these accounts has its own nomination registration, and a nominee registered for one account does not automatically become the nominee for the others.

NRML product code on Zerodha

Mon, 11 May 2026 00:00:00 +0000

NRML (Normal) is a product code on Kite, Zerodha’s trading platform, used for futures and options, currency derivatives, and commodity derivatives positions that are intended to be held overnight or for multiple sessions. Unlike MIS (Margin Intraday Squareoff), there is no auto-square-off under NRML. The position remains open until the trader chooses to close it or until the contract expiry, subject to margin maintenance requirements.

NRML positions are margined at the full exchange-mandated SPAN (Standard Portfolio Analysis of Risk) plus exposure margin, without the intraday discount that MIS provides.

Nudges and behavioural design in Kite

Mon, 11 May 2026 00:00:00 +0000

Overview

Zerodha’s Kite trading platform incorporates a structured set of behavioural nudges – deliberate design interventions that surface warnings, disclosures, and friction at the point of order placement. These nudges draw on research in behavioural economics to slow impulsive decisions, encourage risk awareness, and align retail trader conduct with the disclosures that SEBI mandates. The nudge system became more prominent after SEBI issued its circular on investor protection through technological interventions, and Zerodha expanded the feature set as part of its broader commitment to what it calls “responsible trading.”

Order validity types on Kite, DAY and IOC

Mon, 11 May 2026 00:00:00 +0000

Order validity refers to the duration for which an order remains active in the exchange’s order book if it is not immediately filled. On Kite, Zerodha’s trading platform, every order carries one of two validity types: DAY or IOC (Immediate or Cancel). The validity type is selected at the time of order placement in the order form. Understanding the difference between these two types is essential for controlling execution outcomes, particularly for limit orders and conditional orders.

Power of attorney and DDPI transition

Mon, 11 May 2026 00:00:00 +0000

Overview

For most of the history of modern Indian securities markets, brokers obtained a power of attorney (POA) from clients as part of the account-opening process. The POA granted the broker broad authority to operate the client’s demat account, enabling the broker to debit shares for settlement of sale transactions without requiring the client to issue a separate instruction for each trade. While operationally convenient, the POA model created significant scope for misuse: brokers with POA access could, in principle, pledge or transfer client securities beyond the narrow purpose of settlement.

SL (Stop Loss limit) order on Kite

Mon, 11 May 2026 00:00:00 +0000

An SL (Stop Loss limit) order is a conditional order type that becomes active only when a user-defined trigger price is reached. Once triggered, it enters the exchange order book as a standard limit order at a separately specified limit price. On Kite, Zerodha’s trading platform, this order type is selected by choosing “SL” from the order type dropdown, after which two price fields appear: the trigger price and the limit price.

The SL order is primarily used for risk management, to exit a losing position automatically when the market moves against a trader’s expectation. It is also used to enter positions on breakouts, where a trade is initiated only after the price clears a specific level.

SL-M (Stop Loss Market) order on Kite

Mon, 11 May 2026 00:00:00 +0000

An SL-M (Stop Loss Market) order is a conditional order type that monitors the market for a trigger price and, when that trigger is reached, submits a market order to the exchange for immediate execution at the best available price. On Kite, Zerodha’s trading platform, an SL-M order is placed by selecting “SL-M” from the order type dropdown and entering only a single price field: the trigger price. Unlike the SL (Stop Loss limit) order, no separate limit price is specified. Once triggered, execution is at whatever price the market offers.

STBT and why Zerodha does not allow it

Mon, 11 May 2026 00:00:00 +0000

STBT (Sell Today Buy Tomorrow) refers to a trading strategy in which a market participant sells equity shares today without owning them and buys them back on the following trading day, profiting from an anticipated fall in the share price overnight. In contrast to BTST (Buy Today Sell Tomorrow), which is mechanically feasible under India’s settlement system, STBT is not permitted for retail investors in India’s equity cash segment under current SEBI regulations. Zerodha, in accordance with these rules, does not provide STBT functionality on its Kite platform.

Trigger price vs limit price on Kite

Mon, 11 May 2026 00:00:00 +0000

On Kite, Zerodha’s trading platform, a trigger price and a limit price are two distinct price parameters that appear together in the order form when placing an SL (Stop Loss limit) order. Confusing these two parameters is among the most common errors made by new Kite users, and the consequences, a stop-loss that fails to execute or executes at an unintended price, can be materially harmful.

This article explains what each parameter means, how they interact, and the practical rules for setting them correctly across different scenarios.

Zerodha and T+0 settlement (current rollout)

Mon, 11 May 2026 00:00:00 +0000

Overview

T+0 settlement refers to a securities settlement cycle in which a transaction executed on a trading day (T) is fully settled – with funds credited to the seller and securities credited to the buyer – on the same trading day, before market close or by end of the trading day. Following the completion of the T+1 settlement rollout across all equities in January 2023, SEBI initiated a pilot for an optional T+0 settlement window on the NSE and BSE.

Zerodha and T+1 settlement

Mon, 11 May 2026 00:00:00 +0000

Overview

T+1 settlement refers to a securities settlement cycle in which a transaction executed on a trading day (T) is settled – with securities delivered to the buyer and funds paid to the seller – by the end of the following trading day (T+1). India completed the transition from T+2 to T+1 settlement for equity shares on the NSE and BSE in January 2023, making it one of the first major markets globally to implement T+1 as the standard settlement cycle for all listed equities.

Zerodha clearing corporation flows

Mon, 11 May 2026 00:00:00 +0000

Overview

Every securities transaction executed through Zerodha’s Kite platform passes through a clearing corporation before settlement is completed. The clearing corporation sits between the buyer and seller in every trade, guaranteeing completion of the transaction irrespective of whether either counterparty defaults. For NSE trades, the clearing corporation is NSE Clearing Limited (NSCCL, formerly the National Securities Clearing Corporation Limited). For BSE trades, it is the Indian Clearing Corporation Limited (ICCL). Zerodha, as a broker, holds clearing membership (or uses a clearing member) to participate in these clearing and settlement flows.

Zerodha Pi discontinuation and migration

Mon, 11 May 2026 00:00:00 +0000

Overview

Zerodha Pi was a Windows-based desktop trading application launched by Zerodha around 2015 as the broker’s primary advanced trading platform. Pi offered a more feature-rich environment than the web-based tools of the time, including integrated charting with advanced technical analysis indicators, strategy testing using AmiBroker integration, multi-window layouts, and direct market access features for more active traders. The platform was positioned as Zerodha’s answer to the institutional-grade desktop terminals used by professional traders, adapted for the retail client.

Zerodha tech stack and engineering philosophy

Mon, 11 May 2026 00:00:00 +0000

Overview

Zerodha operates one of the highest-volume retail brokerage platforms in India, processing millions of orders daily across equity, currency, and commodity derivative markets. The technology infrastructure required to support this scale – handling order routing, real-time market data, position tracking, margin calculation, and settlement reconciliation for millions of concurrent users – represents a significant engineering challenge. Zerodha has been unusual among Indian financial services companies in publicly documenting many of its technology choices and engineering decisions through its engineering blog (zerodha.tech) and Z-Connect posts, providing transparency into its technical approach.

Zerodha's open-source contributions

Mon, 11 May 2026 00:00:00 +0000

Overview

Zerodha has been among the most active contributors to open-source software among Indian financial services companies, publishing client libraries, data tools, infrastructure components, and configuration management tools under open-source licences on GitHub. The open-source programme serves multiple purposes: it supports the ecosystem of developers who build applications using the Kite Connect API, it signals technical credibility to the developer community, and it reflects the company’s stated philosophy of contributing to the broader technology community.