Zerodha GTT orders explained – Limits, Margin, Validity, GTC

Published on Thursday, March 25, 2021 by Chittorgarh.com Team

GTT (Good Till Triggered) is an order type that remains valid for a year or till the trigger condition gets hit, whichever is earlier.

The GTT feature is useful for investors who do not trade actively or do not have time to track the markets daily. Such investors can put a GTT order at their target price in mind and do not bother to input the order daily. However, there are certain GTT limitations that one should keep in mind. Read the section on the GTT limit in Zerodha to know more about this.

Key Features

• GTT orders are specific to Zerodha only. No other brokers offer this feature.
• GTT is an alternate to GTC orders as explained below.

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GTC Vs GTT Orders

GTC (Good Till Cancelled) is an advanced order type that remains valid till it executed or cancelled by the customer. GTC orders get released to exchange daily. In case the order doesn't get executed on that day, the same order gets placed on the exchange the next day. This process of order placement to exchange continues till the order gets executed, canceled by the investor, or expired.

The maintenance of GTC orders and its daily placement to the exchange is costly and thus difficult for the discount brokers to offer this service. Zerodha does not provide GTC facilities to its customers. To overcome this challenge, Zerodha launched the GTT orders as an alternative to GTC.

GTT in Zerodha remains valid for one year or till the trigger condition is hit. Unlike GTC, GTT orders get placed to the exchange only when the set trigger condition gets hit. The execution of the order is not guaranteed as it is dependent on the order price. In such a case, the GTT order needs to be placed again.

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GTT option in Zerodha

The GTT in Zerodha is available only for Equity Delivery trades and Bank Nifty and Nifty F&O trades. Zerodha offers to use the GTT feature in Zerodha Kite web and Zerodha Kite app except for Nifty and Bank Nifty GTT as that is currently available only on the Kite web.

Zerodha offers to place various types of GTT orders

• Sell GTT in Zerodha

  You can place a sell GTT order in Zerodha to sell your existing holdings. The sell order can be a single trigger order wherein you can just put the target price and order price. You can also place an OCO order wherein you require a stop-loss price and a target price. When either of the triggers of the condition gets hit, the other trigger condition gets canceled.

• Zerodha GTT Buy order

  You can place a buy GTT order in Zerodha to enter new positions. The buy order can be put as a single trigger wherein you can put a target price at which you would like to buy the stock.

• GTT stop loss in Zerodha

  The stop loss feature in GTT helps to limit the losses. The GTT stop-loss option is available under the OCO trigger type, where you need to input the stop loss trigger price and stop loss limit price. Zerodha offers to input the stop loss trigger price as price or in terms of percentage.

• Zerodha GTT trailing stop loss

  Zerodha does not offer trailing stop loss for GTT orders. It has only stop-loss GTT orders.

• Zerodha GTT market order

  Using GTT in Zerodha, you can only place GTT limit orders in Zerodha. You cannot place a GTT market order. However, you can set the limit order in such a way that it acts as a market order. For a limit order to work as a market order, set the buy limit price much above the trigger price and the sell limit price much below the trigger price.

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GTT limit in Zerodha

Following are GTT order limitations:

• GTT feature for stocks is restricted only for Equity Delivery trades (CNC). There is no Zerodha GTT for MIS/Intraday trades.
• Zerodha GTT for options is available only for Nifty and Bank Nifty F&O contracts (NRML).
• A triggered GTT does not always mean guaranteed execution.
• GTT feature for Nifty and Bank Nifty F&O is available only on Zerodha Kite web.
• Only 50 GTT orders are allowed per customer.
• There is no support provided for GTT orders. They need to be managed independently by the investors on their own.
• Once the GTT order gets triggered, it moves out of the GTT queue and needs to be placed again if not executed.
• GTT sell order can get rejected or failed if the TPIN is not authorized or has expired its validity of 90days.
• GTT order placement is allowed only during market hours.

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Setting GTT in Zerodha (How to use GTT order in Zerodha?)

You can use GTT in Zerodha app or on the Zerodha Kite web. The GTT feature order for Nifty or Bank Nifty is currently available only on the Kite web. Creating GTT in Zerodha is a simple and easy process.

Steps to create GTT order in Zerodha

1. Log in to Zerodha Kite web or Zerodha app.
2. In the Zerodha Kite web, select the scrip from the market watch and go to the short menu by clicking on ‘…' that appears on the right side. You will see Create GTT option in the dropdown.
3. In the Zerodha app, select the desired scrip. You will see Create GTT option.
4. Click on Create GTT.
5. Submit the transaction type as Buy or Sell.
6. Select the trigger type as Single or OCO (One cancels the other).
7. For Single trigger type – Input the trigger price and limit price for the desired quantity
8. For OCO trigger type – Input Stop loss trigger price and limit price and Target trigger price and limit price for the required quantity
9. Tick to agree to the GTT Terms.
10. Click on Create in web and swipe on Create GTT in the Zerodha app.

 

 

Points to Note for GTT trade Zerodha:

1. Zerodha GTT trigger price can be set as a price or by using percentage.
2. In the case of OCO, when one trigger condition hits, the other trigger gets auto-canceled.
3. The executions when GTT gets triggered are not guaranteed.
4. Single trigger type gets used to buy or sell existing holdings.
5. OCO trigger type gets generally used to set targets and stop loss for stock holdings.

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GTT Zerodha example – How Zerodha GTT works?

In this section let us see the examples for both trigger types using the Sell transaction type.

Example 1 using Single Trigger Type

Say, the current price of Infy is Rs 785.70. You set a trigger price of Rs 799 and a limit price of Rs 799. (The trigger and limit price set is higher than market price as it is a sell trade)

In this case, if the price of INFY reaches Rs 799, the trigger price of Rs 799 gets hit on the exchange and a limit sell order at Rs 799 gets placed. The order gets executed if there is sufficient stock in your Demat account and a price match at the set limit price is found.

If the limit price in the above example was Rs 805, the execution would be possible only if the stock reaches that price. But if the stock price on that particular day does not go over Rs 802, the GTT triggered order gets canceled and needs to be placed again.

 

 

Example 2 using OCO Trigger Type

Say, the current price of Infy is Rs 785. You set a target trigger price and target limit price of Rs 800 and stop-loss trigger price and the stop-loss limit price at Rs 700. (The Target trigger and limit price is set higher than the market price as you have a target in mind to sell the shares at that price. But in the worst case, if the market is not in your favor and you have an option to set a stop loss to limit your losses.

In this case, if either trigger price of Rs 700 or Rs 800 gets hit on the exchange, a limit sell order at the corresponding limit price is placed. This order gets executed if you have the stock in your Demat account and a buyer is available to purchase at that price. Once either of the triggers gets hit, the other trigger gets canceled.

 

 

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Zerodha GTT Margin

Zerodha does not require any margins at the time of GTT order placement. However, when the order gets triggered, Zerodha checks for margin and holdings before placing the order to the exchange. The GTT orders get rejected in case of insufficient margins or holdings as applicable.

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GTT Error in Zerodha

The most common concern observed in the GTT Zerodha order is GTT triggered but not executed. This is ideally not an error but this is the way a GTT order in Zerodha works. A triggered GTT does not guarantee trade executions. A GTT order allows only limit orders to be placed at the exchange. Once the GTT is triggered but, no match is found at the specified limit price, the GTT order gets canceled at the end of the day.

To increase the probability for trade executions, the buy limit orders should be above the trigger price and the Sell Limit orders should be below the trigger price.

Sometimes it happens so that the GTT gets triggered and reaches the limit order price but gets rejected if the T Pin is not authorized. You are required to pre-authorize the trades using T-Pin for seamless transactions in case of sell trades. A T-Pin remain valid for 90 days. In case the TPIN gets expired, the order gets rejected.

Zerodha GTT orders placement does not require any margins. However, when the order gets triggered, you need to ensure to have sufficient margins or stocks as the case be, failing which the order gets rejected.

It is important to note that GTT is for as a long-term stop-loss or target. Thus, the difference between trigger and LTP should be at least 0.5% of the stock value. In case, the difference is lesser than the expected limit, the order gets rejected.

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GTT Zerodha validity

Zerodha GTT time limit is one year from the date of order placement or GTT trigger whichever is earlier.

Once the GTT is triggered, the validity of the GTT order gets expired irrespective of its execution.

The GTT orders for the stocks with corporate action get canceled by the system before the ex-date. Such orders are required to be placed again.

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Zerodha GTT Tpin

The GTT sell order in Zerodha requires Zerodha GTT authentication by way of CDSL TPIN authorization. You can pre-authorize your holdings that will remain valid for 90 days. At the end of 90 days, if you fail to authorize it again, the GTT order gets canceled or rejected when triggered.

In case you have submitted a POA, you do not require to authorize the TPIN.

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Conclusion

GTT trigger Zerodha is an innovative feature introduced by Zerodha to substitute GTC. The GTT offers passive stock market investors an opportunity to book profits and limit losses without actively tracking the markets. However, there are still certain features of GTC that GTT does not offer. Hence, Zerodha should look to add more features to bring it at par with GTC.

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