WHAT it contains: exactly two legs — entry leg + stop-loss leg.
WHAT it lacks: a built-in target (you exit the profit side manually or via the SL).
WHY leverage is higher: the broker's worst-case exposure is capped at (E−S)×Q, not the full share value E×Q. Less risk to the broker → they let you control more with less margin.
WHAT it contains: entry + SL + target (+ optional trailing SL).
Key rule — OCO: the SL and target are One-Cancels-the-Other. If the target hits, the SL is auto-cancelled, and vice-versa. You can never be double-exited.
How many legs does a Cover Order have and what are they?
Two — entry + compulsory stop-loss.
How many legs does a Bracket Order have?
Three — entry + stop-loss + target (optional trailing SL).
Why do brokers give higher leverage on Cover Orders?
Because the compulsory SL caps their worst-case exposure at (E−S)×Q.
What does OCO mean in a Bracket Order?
One-Cancels-the-Other: if target hits the SL is cancelled, and vice-versa.
Formula for max loss on a long Cover Order?
(E−S)×Q.
Formula for reward-to-risk of a long Bracket Order?
(T−E)/(E−S).
How does a trailing stop update for a long?
Snew=max(Sold,Pmax−d) — only ratchets up.
Which of CO/BO includes a target?
Only the Bracket Order.
Are BO and CO intraday or delivery products?
Intraday — auto squared-off before close.
A BO: E=200, S=196, T=208. What is R:R?
(208−200)/(200−196)=8/4=2.
Recall Feynman: explain to a 12-year-old
Imagine you're on a roller-coaster but you get to set two rules before it starts: "If it goes up to this height, stop and let me off happy" (that's the target), and "If it drops to this low, stop and let me off before I get scared" (that's the stop-loss). A Cover Order only lets you set the scary-stop. A Bracket Order lets you set BOTH stops — and can even slide the scary-stop upward as the ride climbs, so you always keep some of the fun you've already had.
Dekho, trade lagana sirf aadha kaam hai — asli discipline yeh decide karne mein hai ki exit kahan karoge, chahe aap sahi ho ya galat. Bracket aur Cover order isi kaam ke liye bane hain: entry ke saath hi aap apne exit points bhi set kar dete ho, taaki beech trade mein emotion aake plan kharab na kare.
Cover Order (CO) mein sirf do cheezein hoti hain — entry aur ek compulsory stop-loss. Target nahi hota. Kyunki aapka maximum loss (E−S)×Q pe fix ho jaata hai, broker ko risk kam hota hai, isliye woh aapko zyada leverage deta hai. Yaad rakho: CO ka matlab hai "Compulsory-stop Only".
Bracket Order (BO) mein teen legs hoti hain — entry, stop-loss, aur target. Iska ek maza yeh hai ki SL aur target OCO (One-Cancels-Other) hote hain: ek hit hua toh doosra apne aap cancel. Aur ek trailing stop-loss bhi hota hai jo price upar jaate hi upar khisak jaata hai (Snew=max(Sold,Pmax−d)), yaani profit lock karta jaata hai, kabhi neeche nahi aata.
Kyun important hai? Kyunki market fast chalti hai aur log hesitate karte hain ("thoda ruk jaao, wapas aayega"). Yeh orders aapke liye woh discipline automatic kar dete hain. Sirf yaad rakho — dono intraday products hain, market band hone se pehle auto square-off ho jaate hain.
