Zerodha market protection freak trade market order limit price protection slippage

Market price protection on the Kite order window

From WebNotes, a public knowledge base. Last updated 21 June 2026. Reading time ~10 min.

Key facts

What it does	Fills a market order quickly at the best available price but converts it into a limit order if the price moves outside a set protection range, guarding against freak fills
How to enable	On the Kite order window, click Advanced, then Market protection
Equity and futures bands (% of LTP)	Under Rs 100 is 2 per cent; Rs 100 to 500 is 1 per cent; above Rs 500 is 0.5 per cent
Options bands (% of LTP)	Under Rs 10 is 5 per cent; Rs 10 to 100 is 3 per cent; Rs 100 to 500 is 2 per cent; above Rs 500 is 1 per cent
Unfilled remainder	Any quantity that cannot fill within the protection range remains open as a limit order at the protection price

Market protection on the Kite order window is a Zerodha feature that fills a market order quickly at the best available price but converts it into a limit order if the price moves outside a set protection range, so a market order cannot fill at a freak price far from the last traded price. A freak trade is an execution at a price far above or below the prevailing market, usually caused by a thin order book or a fat-finger order; market protection caps how far from the current price a market order is allowed to fill.

This entry sets out what market protection does, how to enable it through the Advanced section of the order window, the exact percentage bands for equity, futures and options, and how the buy and sell ranges are computed. It also covers the partial-fill behaviour, where any unfilled quantity rests as a limit order at the protection price, and the limitation that protection cannot fully shield you when a freak trade has already distorted the last traded price the band is built on. The closely related at-the-open variant is covered in market price protection in ATO , and the order-window feature itself is one reason a market order can execute as a limit order .

Conflict-of-interest disclosure. This guide is published by the WebNotes Editorial Team for informational purposes and is written independently. WebNotes operates a Zerodha account-opening referral programme, disclosed on the pages that carry the referral link; this guide does not carry it and earns no referral commission from the procedure described here.

What market protection does

A plain market order takes whatever price the order book offers to fill the full quantity at once. On a liquid scrip near a stable price, that is fine. On a thin scrip, or in a fast market, the book can be sparse, and a market order can sweep up to a price far from the last traded price, the freak fill. Market protection sits between the order and that outcome. It still seeks an immediate fill at the best available price, but it draws a percentage boundary around the current market price and refuses to fill beyond it. If the order cannot complete inside that boundary, the part that cannot fill is parked as a limit order at the boundary price rather than chasing the book higher or lower.

The trade-off is explicit. You give up the certainty that the whole quantity fills immediately, in exchange for certainty that nothing fills at a price worse than the band. For most traders on most scrips, that is the right trade.

How to enable it on the order window

Market protection is an advanced order option, not a default toggle. On the Kite order window, click Advanced, then Market protection. With it on, the order behaves as a protected market order: it tries to fill at the market, and the system enforces the percentage band described below. Without it, a market order is a plain market order and can fill anywhere the book allows.

The percentage cannot be set by the user; the bands are decided by Zerodha. A trader cannot widen or narrow the protection range, so the feature is a fixed band keyed to the instrument type and price, not a configurable slippage tolerance.

Protection percentages by instrument and price

The band is a percentage of the last traded price, and it steps down as the price rises, because a fixed rupee move is a smaller percentage on a higher-priced instrument. The current bands are below.

Instrument	Last traded price	Protection band
Equity and futures	Under Rs 100	2 per cent
Equity and futures	Rs 100 to Rs 500	1 per cent
Equity and futures	Above Rs 500	0.5 per cent
Options	Under Rs 10	5 per cent
Options	Rs 10 to Rs 100	3 per cent
Options	Rs 100 to Rs 500	2 per cent
Options	Above Rs 500	1 per cent

Options carry wider bands at every tier because option premiums are more volatile in percentage terms than the underlying, so a tighter band would convert too many ordinary fills into resting limit orders.

How the buy and sell ranges are set

The protection range is set from the current market price, a certain percentage above the current bid for a buy order, and below the current ask for a sell order. A buy is therefore allowed to fill up to the band above the market, and a sell down to the band below it. If the order cannot fill within that range, it converts to a limit order at the protection price.

A worked case makes it concrete. Take a stock trading around Rs 90 and a buy market order for 100 shares. Because the price is under Rs 100, the 2 per cent band applies, setting the protection limit at Rs 91.80. Shares fill at Rs 91.80 or below; any unfilled quantity stays open as a limit order at Rs 91.80. The order never pays more than Rs 91.80, whatever the book looks like above that level.

Partial fills and the resting limit order

The partial-fill behaviour is the part traders most often misread. If the full quantity cannot fill within the protection range, the remaining quantity remains open as a limit order at the protection price. So a protected market order can leave you with a position smaller than you asked for, plus an open limit order for the balance. That open order then sits in your order book , and you can let it fill if the market comes back to that level, modify it, or cancel it. It does not auto-cancel; treating it as a fire-and-forget market order is the mistake.

This is also why a market order can show in your records as a limit fill. When protection converts the unfilled portion, the order is genuinely a limit order from that point. If you expected a clean market fill and find a limit line instead, the explanation is usually market protection, covered in how to fix a market order executed as a limit order .

The freak-trade limitation

Market protection narrows freak-fill risk but does not remove it, because the band is anchored to the last traded price. If a freak trade has already printed and become the LTP, the protection range is calculated relative to that distorted price. So if a freak trade happened at Rs 1,000, the protection limit is set at roughly Rs 1,010 or Rs 990 depending on direction, and the order could execute near Rs 1,000, the freak price itself. The feature defends against a market order chasing the book past a stable LTP; it cannot defend against an LTP that is itself the freak.

For stronger protection, place a limit order at a price you choose, which fixes the worst price absolutely at the cost of fill certainty. The hybrid that many traders use is a buy limit set above the market or a sell limit set below it, which fills like a market order while capping the price, an approach related to using an SL-L order like an SL-M order .

Relationship to exchange Limit Price Protection

Market protection is a broker-side order-window control. The exchanges run their own pre-trade control, Limit Price Protection (LPP), on F&O limit and SL-L orders, to reject orders priced far from the market. For NSE F&O, the LPP range is plus or minus 3 per cent on futures, plus or minus 40 per cent on options with premium above Rs 50, and plus or minus Rs 20 in absolute terms on options with premium below Rs 50. For BSE F&O, it is plus or minus 3 per cent on futures, subject to a minimum LPP of Rs 1.50, and plus or minus 60 per cent on options, subject to a minimum of Rs 30. An order outside the LPP range is cancelled by the exchange with the message that the price is outside the current allowed limit price protection range. The two layers complement each other: Zerodha’s market protection caps slippage on market orders, while the exchange LPP caps how far a limit or SL-L order can be priced from the market.

External references

References

Zerodha support, What is Market protection on the order window? (as of 21 June 2026).
Zerodha support, Why did my market order get executed as a limit order? (as of 21 June 2026).
NSE India, Limit Price Protection FAQs, futures plus or minus 3 per cent and option bands (as of 21 June 2026).
BSE India, Limit Price Protection on F&O contracts, futures and option minimum LPP values.

Frequently asked questions

What is market protection on the Kite order window?

It is a Zerodha feature that fills a market order quickly at the best available price but converts it into a limit order if the price moves outside a set protection range. This stops a market order from filling at a freak price far from the last traded price.

How do I turn on market protection in Kite?

On the order window, click Advanced, then Market protection. The feature applies a percentage band around the current market price, above the bid for a buy and below the ask for a sell, and caps the fill at that band.

What is the market protection percentage for equity?

For equity and futures it is set by the last traded price: 2 per cent under Rs 100, 1 per cent between Rs 100 and Rs 500, and 0.5 per cent above Rs 500. The lower the price, the wider the percentage band.

What happens to the part of my order that cannot fill within the range?

If the full quantity cannot fill within the protection range, the remaining quantity stays open as a limit order at the protection price. It can fill later if the market returns to that level, or you can cancel it.

Does market protection guarantee I avoid a freak trade?

Not entirely. The protection range is calculated from the last traded price, so if a freak trade has already distorted the LTP, the band shifts with it and the order can still execute near the freak price. It limits slippage, it does not remove it.

Is this the same as exchange limit price protection?

No. Market protection is a Zerodha order-window feature on the broker side. Limit Price Protection (LPP) is an exchange-level control on F&O limit and SL-L orders. They work together but are set by different parties.

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Last reviewed: 21 June 2026
Conflicts of interest: WebNotes is independent. No relationship with any broker, registrar or bank named in this article.