128 algo trading, order, F&O and risk terms explained simply — for Indian traders who want to understand the words before they automate anything. Search, filter by topic, or jump to a letter.
A temporary digital pass your broker issues after you log in, which lets software place orders on your account for that session.
When you log in to a broker's API, the broker hands back an access token. Your trading software attaches it to every request, so the broker knows the order really comes from you. Many Indian brokers make these tokens expire every day, so each account has to be logged in again every trading day. Treat a token like a password: anyone holding it can act on your account until it expires.
Example · Each morning, software with an auto-login option logs your accounts in and collects a fresh token for each one before the market opens.
An order you place while the market is closed, which your broker holds and sends to the exchange when the next session opens.
AMOs let you queue orders in the evening or early morning. They reach the exchange at or near the next open, when the price may be quite different from the last close. Each broker sets its own AMO timings and the order types it allows. Copy trading software that watches live orders may not copy AMOs; MyAlgoMate's Copy Trading Software, for instance, does not.
Also called: Price alert, TradingView alert, Chartink alert
A notification a platform sends when a condition you defined becomes true, such as a price level or an indicator crossing.
Alerts can arrive as pop-ups, emails, app notifications or webhook calls. A webhook alert is what links a charting or scanning tool to execution software: when it fires, the software receives a message and can place orders. Alert settings, such as how often an alert may fire, decide when signals reach your software.
Also called: Algorithmic trading, Automated trading, Algo
Using software to place, manage and exit trades automatically, based on rules you have set in advance.
In algo trading, a program watches for conditions you define and sends orders to your broker when they are met, usually through the broker's API. It can act faster and more consistently than a person clicking buttons, and it can handle many positions or accounts at once. It does not remove market risk: the program only carries out the rules, and the rules are yours. In India, retail algo trading runs through SEBI-registered brokers, who set their own rules for API access.
Example · A trader sets up a TradingView alert. When it fires, execution software receives it and places the order in their broker account.
A fixed set of step-by-step rules that a computer follows to complete a task, such as deciding when to place an order.
An algorithm is a recipe written precisely enough for a computer to follow. In trading, it might say: when this condition is met, place this order; when that condition is met, exit. The computer does not think or guess. It only follows the rules it was given, and whether those rules are sensible is always the trader's decision.
Example · "When my scanner sends an alert, place a limit order for one lot, and square off at 3:15 pm" is a simple trading algorithm.
A doorway that lets one program talk to another; in trading, it lets software send orders to your broker and read your positions.
Your broker's website and app are made for people. An API is the same service made for programs: software sends a structured request, such as "buy 50 units at this price", and the broker sends back a reply. Most algo trading in India runs on broker APIs. Some brokers offer API access free, while a few charge a fee for it.
Also called: API key, API secret, App key, API credentials
A pair of codes your broker gives you to identify your app when it connects to the broker's API.
You usually create them on your broker's developer or API page. The API key works like a username for your app, and the API secret works like its password. Together with your login and 2FA, they are used to get the daily access token. Keep the secret private, and regenerate it with your broker if you think it has leaked.
The option strike closest to the underlying's current price.
ATM is a moving label: as the underlying moves, a different strike becomes ATM. ATM options carry the most time value, and their delta is roughly 0.5 for calls and -0.5 for puts. Strategy software often chooses strikes relative to ATM, such as "ATM" or "two strikes away", at the moment a signal arrives.
Example · Say Nifty is at 24,012 and strikes are listed 50 points apart. The 24,000 strike is the ATM strike.
Letting software carry out repeat trading tasks, such as placing orders, applying stop-losses or exiting at a set time, instead of doing them by hand.
Automation can cover a whole strategy or just one chore. Some traders automate only execution: they decide the trades, and software places the orders across their accounts. Others also automate the decision, using a scanner, an alert or their own code. Either way, the software follows its settings exactly, so checking those settings is part of the job.
Running a strategy's rules over past market data to see how they would have behaved.
A backtest replays history and applies your entry and exit rules to it, trade by trade. It helps you check that the rules do what you meant and spot mistakes before real money is involved. It has limits: past prices do not predict future ones, and a backtest can miss real costs such as slippage, brokerage, taxes and orders that would not have filled.
A group of orders you build together and send in one click, such as all the legs of an options strategy.
A basket saves you placing several related orders one by one. Brokers usually show the total margin needed for the whole basket before you send it. Each order in the basket is still a separate order at the exchange, so one can fill while another is rejected or left open.
Also called: Bid price, Ask price, Offer price, Bid-ask spread
The bid is the highest price a buyer is offering right now; the ask is the lowest price a seller will accept.
A market order to buy usually fills at the ask, and a market order to sell usually fills at the bid. The gap between them is the bid-ask spread. Busy contracts tend to have a narrow spread, while thinly traded ones can have a wide spread, which makes slippage more likely. Trading software often lets you price limit orders off the bid, the ask or the midpoint between them.
Example · Say an option shows a bid of ₹101.00 and an ask of ₹101.50. The bid-ask spread is ₹0.50.
An intraday order that places your entry together with a target order and a stop-loss order, so both exits are set from the start.
Once the entry fills, the target and stop-loss orders sit on either side of it; when one executes, the other is cancelled. Bracket orders are intraday only, and the broker squares them off before the close if they are still open. Not every broker offers them, and several have withdrawn them over the years.
Also called: Brokerage charges, Broker fees, Trading charges
The fee your stock broker charges for executing your orders.
Brokers charge either a flat fee per executed order or a small share of the trade's value, and the rates differ by broker and segment. On top of brokerage, each trade carries other charges: STT, exchange transaction charges, a SEBI fee, stamp duty and GST. These are set separately and can change, so the total cost of a trade is always more than the brokerage alone.
One of India's two main stock exchanges, based in Mumbai and home to the Sensex index.
Founded in 1875, BSE is Asia's oldest stock exchange. It runs equity, derivatives and currency segments, and index options such as Sensex options trade here. In trading software, BSE's equity segment is usually coded BSE and its F&O segment BFO.
A contract that gives the buyer the right, but not the duty, to buy the underlying at the strike price by expiry.
The buyer pays a premium for this right; the seller, or writer, receives it and takes on the duty to honour the contract. "CE" in a contract name stands for Call European: options on NSE and BSE can only be exercised at expiry. All else being equal, a call's price tends to rise when the underlying rises.
A chart bar that shows a period's open, high, low and closing prices, for example one candle per 5 minutes.
The body of the candle runs from the open to the close, and thin lines, called wicks, show the high and the low. Many scans and alerts are checked when a candle closes, so their signal can only leave after the candle's period has ended. On a thinly traded contract, a candle may only be confirmed when the next trade arrives, which can add a few seconds.
An Indian web-based stock scanner that finds stocks matching technical conditions you build, and can send alerts by webhook.
You build a scan from conditions such as price, volume and indicators, and Chartink lists every stock that matches. On a paid plan, a scan can run in real time and send a webhook alert that carries every symbol it found. Execution software such as TradeBridge can turn those alerts into orders, so one scan can drive a whole basket of stocks.
In copy trading, an account that automatically receives a copy of every order placed in the master account.
Each child account is sized by its own multiplier and can be at a different broker from the master. In MyAlgoMate's Copy Trading Software, child accounts are usually your own other accounts and your family's, and nothing has to be installed for them. Each child account still needs working API access with its own broker and its IP address registered there.
The highest and lowest price a stock is allowed to trade at in a day, as set by the exchange.
When a stock hits its upper or lower circuit, it can trade only within the band, and often there are orders on one side only. Exchanges set and revise these bands for each stock, and stocks in the F&O segment use dynamic bands that the exchange can widen during the day. Separately, a market-wide circuit breaker can halt all trading if a benchmark index moves sharply. Orders priced outside the band are rejected.
Also called: Clearing house, NSE Clearing, BSE Clearing, ICCL, MCXCCL
The exchange-linked body that confirms every trade, collects margins, and makes sure both sides receive their money or shares.
When you trade, the clearing corporation steps in between buyer and seller, so neither side depends on the other paying up. It calculates margins, runs the daily MTM settlement for futures, and handles pay-in and pay-out on settlement day. NSE trades clear through NSE Clearing, BSE trades through BSE Clearing (formerly Indian Clearing Corporation, ICCL), and MCX trades through MCX Clearing Corporation.
Also called: Delivery, CNC product type, Delivery trade
The product type for buying shares to hold in your demat account beyond today, also called a delivery trade.
With CNC you pay the full value of the shares, and after settlement they are credited to your demat account. There is no automatic square-off, so the holding stays until you sell it. Some brokers simply call this product type "Delivery".
The legal record your broker sends after each day you trade, listing every trade and every charge.
A contract note shows the time, price and quantity of each trade, plus brokerage, STT, exchange charges, stamp duty and GST. Brokers usually send it by email, and you can also download it from the broker's back-office website. It is the document to check if a fill or a charge looks wrong.
Software that copies orders from one account, the master, into other accounts, the children, each sized by its own multiplier.
You place a trade in the master account as usual, by hand or by algo, and the software places matching orders in every linked child account. Depending on the tool, it can also copy order changes and cancellations, round part lots, split orders over the freeze limit, and flag accounts that are out of line with the master. The software only repeats your orders; it does not decide what to trade.
An intraday order that must be placed together with a compulsory stop-loss order.
Because the stop-loss is built in, brokers often ask for less margin on a cover order than on a plain intraday order. The stop-loss leg cannot be removed, only moved. Like bracket orders, cover orders are intraday only, are squared off automatically near the close, and are not offered by every broker.
An order that stays valid only for the current trading session and is cancelled automatically if it has not filled by the close.
Day is the default validity for most orders in India. Any unfilled quantity is cancelled at the end of the session, so nothing carries over to the next day. For an order that should wait longer, many brokers offer GTT orders.
How much an option's price is expected to move for a one-point move in the underlying.
Call deltas run from 0 to 1 and put deltas from 0 to -1. A delta of 0.5 means the option moves about half a point for each point the underlying moves. Deep in-the-money options have a delta near 1 (or -1), and far out-of-the-money options have a delta near 0. Delta itself changes as the price moves, and that rate of change is called gamma.
Also called: Dematerialised account, DP account, Demat
An account that holds your shares and other securities in electronic form.
In India, demat accounts are held with one of two depositories, NSDL or CDSL, through a depository participant, which is usually your broker. Your trading account is where you place orders; your demat account is where the shares sit after you buy them for delivery. Intraday trades, and F&O positions closed before expiry, do not move shares into your demat account.
A financial contract whose price comes from something else, such as an index, a stock or a commodity, called the underlying.
Futures and options are the most common derivatives. In India they trade on NSE, BSE and MCX and are regulated by SEBI. Derivatives trade in fixed lots, have an expiry date, and need margin rather than full payment upfront, so a small price move can mean a large change in MTM.
A fall in account value from its highest point to a later low point, before a new high is reached.
Drawdown measures how deep a losing stretch went, in rupees or as a share of the peak. Maximum drawdown is the deepest such fall over a period, and it is a common figure in backtest reports. A past drawdown does not set a limit on future ones.
Also called: Excel trading, Excel VBA trading, Google Sheets signals, Spreadsheet trading
Using a spreadsheet's formulas or macros to work out trades and send them to a broker or execution software through an API.
Traders who keep their rules in Excel can use VBA macros to make an HTTP request, the same kind of call any program makes to an API. Google Sheets can do something similar with Apps Script. The spreadsheet makes the decision, and the execution software or broker API only carries out the call. An Excel workbook has to stay open, on a machine that is running all day, for this to work.
A section of an exchange for one type of product, such as equity cash, F&O, currency or commodities.
Each segment has its own rules, margins and trading hours, and each one has to be activated on your broker account before you can trade in it. Trading software often uses short codes: NSE (NSE equity), NFO (NSE F&O), BSE, BFO (BSE F&O), CDS and BCD (currency on NSE and BSE) and MCX. The exact codes can differ slightly between brokers. Copy trading software can let you switch copying on or off segment by segment.
Also called: Expiry day, Contract expiry, Days to expiry, DTE
The last day a futures or options contract exists, after which it is settled and stops trading.
Each exchange decides which weekday its contracts expire on, and this has changed several times, so always check the current calendar. Index contracts are settled in cash. Stock futures and options held to expiry are settled by actual delivery of shares, which can need far more money than the position itself. Days to expiry (DTE) is simply how many days are left until that date.
The total value of your open positions that market moves can affect at any moment.
Exposure is usually measured as the total value of your open positions, not the margin you put up. Because derivatives need only margin, your exposure can be many times your capital. Looking at exposure across all accounts and strategies together shows how much a single market move would affect you. Exchanges also charge a separate "exposure margin" on F&O positions.
Also called: Ban period, MWPL ban, Securities in ban, F&O ban list
A period when a stock's F&O positions can only be reduced or closed, not added to, because open interest is too high.
Exchanges set a market-wide position limit for each F&O stock. When total open interest crosses the trigger level, the stock enters the ban period, and new positions that would add to open interest are not allowed. The ban lifts once open interest falls back below the exchange's threshold. The ban list is published every trading day, and orders that break the rule are rejected or can attract penalties.
Testing a strategy on live market data as it happens, usually with paper trades or very small quantities, after a backtest.
A backtest looks at the past; a forward test watches your rules work in the present, in real market conditions. It shows practical things a backtest cannot, such as how alerts arrive, how orders fill and how the software behaves through a full trading day. Forward tests are often run in paper mode first.
Also called: Freeze limit, Quantity freeze, Maximum order quantity
The largest quantity the exchange allows in a single F&O order; an order above it is refused.
Exchanges set a freeze quantity for each derivative contract to prevent accidental oversized orders. It differs by underlying and is revised from time to time, so software should read it from the exchange's current instrument data rather than use a fixed number. To trade more than the freeze quantity, the order has to be split into several smaller orders.
Also called: Futures, FUT, Index futures, Stock futures
An agreement to buy or sell the underlying at a fixed price on the expiry date, traded on an exchange in fixed lots.
Unlike an option, a futures contract binds both the buyer and the seller. You put up margin rather than the full contract value, and the change in the contract's value is settled every day through the clearing corporation, as MTM. A position can be squared off any time before expiry, or rolled over to a later contract.
How fast an option's delta changes when the underlying moves.
High gamma means delta, and so the option's sensitivity, can shift quickly. Gamma is usually highest for at-the-money options and rises as expiry gets close, which is why options near expiry can change price sharply. Option buyers have positive gamma and option sellers have negative gamma.
An order that waits with your broker, for days or weeks, and is sent to the exchange only when the price reaches your trigger.
A GTT is held by the broker, not the exchange. When the last traded price touches your trigger, the broker places a regular limit order at the price you chose. A GTT does not block funds in advance or ensure a fill: if the price jumps past your limit, the order can stay unfilled. How long a GTT stays valid is set by each broker.
Also called: Hedging, Hedge leg, Protective option
A second position taken to offset part of the risk in a first one.
In options, a common hedge is buying a further out-of-the-money option alongside one you sell, so part of the sold option's exposure to a large move is offset. Exchanges recognise many hedged positions when working out margin, so a hedged position often needs less margin than an unhedged one. A hedge also costs money and changes how the whole position behaves, so it is a trade-off rather than a safety net.
Example · In TradeBridge, a hedge leg is placed before the main sell leg, so the hedge is already in position when the sell goes in.
A large order split into smaller pieces, where only one piece at a time is visible to the market.
You set the total quantity and the number of pieces. The broker sends one piece; when it fills, the next one goes in, so the market depth only ever shows a small part of the full order. Brokers that offer iceberg orders set their own limits on the number of pieces. It is related to, but not the same as, slicing an order to stay under the freeze quantity.
The amount of future price movement the market is pricing into an option, worked backwards from the option's premium.
IV is not a reliable forecast; it is simply what current option prices imply. When traders expect bigger moves, for example ahead of results or major events, option premiums and IV tend to rise, and after the event they can fall back. NSE's India VIX index is calculated from Nifty option prices and is often read as a gauge of overall IV.
Also called: Stock market index, Nifty 50, Sensex, Bank Nifty
A single number that tracks the combined price of a fixed basket of stocks, such as the Nifty 50 or the Sensex.
The Nifty 50 tracks 50 large companies on NSE, and the Sensex tracks 30 on BSE; sector indices such as Bank Nifty track one part of the market. You cannot buy an index itself, but you can trade index futures and options, which are settled in cash, or buy funds that follow it. Which indices have F&O contracts, and when they expire, is decided by the exchanges.
The part of an option's premium that it would be worth if it expired right now.
For a call, intrinsic value is the underlying price minus the strike; for a put, it is the strike minus the underlying price. It can never be below zero, so OTM and ATM options have no intrinsic value. Whatever is left of the premium is time value.
Example · With the underlying at 24,100, a 24,000 call has an intrinsic value of 100 points. If its premium is 160, the other 60 points are time value.
An order that must fill immediately, fully or partly, with any quantity that cannot fill at once cancelled.
IOC is a validity setting, like Day. It is used when you do not want an unfilled order left waiting in the order book. Because unfilled quantity is cancelled straight away, an IOC limit order can end up partly filled or not filled at all.
A four-leg options structure: a sold call and a sold put, each paired with a further-away bought option of the same type.
All four legs share the same underlying and expiry. The two sold options sit on either side of the current price, and the two bought options sit further out, beyond them. In effect, it is a bear call spread and a bull put spread combined. In trading software it is simply four legs, entered and exited together.
An option that already has intrinsic value: a call with a strike below the current price, or a put with a strike above it.
ITM options cost more because part of their premium is intrinsic value. They have a higher delta than ATM or OTM options, so they follow the underlying more closely. At expiry, ITM index options are settled in cash for their intrinsic value.
Example · With the underlying at 24,000, a 23,800 call and a 24,200 put are both in the money.
Also called: Exit All, Panic button, Square off all
An emergency control that stops trading at once, by squaring off all open positions, blocking new orders, or both.
Many Indian brokers offer a kill switch that disables trading in chosen segments for a period you pick. Trading software usually has its own version: an Exit All button that squares off everything, in every account, in one press. Exiting positions and stopping new orders are separate actions, so a full stop usually needs both.
The price at which the most recent trade in a stock or contract took place.
LTP is the number most apps show as "the price". It is a record of the last deal, not a promise of the next one: the next buyer pays the ask, and the next seller gets the bid. Stop-loss and GTT triggers are usually checked against the LTP.
The delay between something happening, such as a signal or a price change, and your order reaching the exchange.
Latency adds up across every step: the signal source, your internet connection, your software, the broker's API and the exchange. It is usually measured in milliseconds, but one slow step can add seconds. Some delay sits in the signal itself: an alert that waits for a candle to close cannot leave before the candle has closed. A stable cloud server can shorten the network part, but no setup removes latency entirely.
Example · If a TradingView alert leaves 3 seconds after the candle closes, the order cannot reach your broker before then, however fast the execution software is.
One individual order or position inside a multi-part strategy, for example the call or the put in a straddle.
A straddle has two legs and an iron condor has four. Each leg has its own instrument, side, strike, expiry and quantity, and in many tools its own stop-loss and target. Legs are placed as separate orders, so one leg can fill while another is rejected, which is why the order and handling of legs matter.
Example · TradeBridge lets you build up to eight legs per side, each with its own strike selection and exits.
An order to buy or sell at a price you set or better, so it will not fill at a worse price.
A buy limit fills at your price or lower; a sell limit fills at your price or higher. This protects you from unexpected fill prices, but if the market moves away, the order may wait, fill partly, or not fill at all. Execution software can revise a limit price a set number of times until it fills, if you allow it to.
Example · Say a stock trades at ₹102 and you place a limit buy at ₹100. The order waits in the order book and fills only if someone will sell at ₹100 or less.
Also called: Long position, Short position, Going long, Going short, Short selling
Going long means buying first and selling later; going short means selling first and buying back later.
A long position moves in your favour when the price rises, and a short position moves in your favour when it falls. In the equity cash segment, a short sale is normally squared off the same day, because shares you do not own cannot be delivered at settlement. In futures and options, short positions can be carried overnight, subject to margin.
The fixed number of units in one futures or options contract; you can only trade whole multiples of it.
Lot sizes are set by the exchange for each underlying and are revised from time to time, so software should read them from current exchange data. F&O order quantities must be whole multiples of the lot size. When a multiplier produces a part lot, copy trading software has to round it up or down.
Example · If a contract's lot size were 50, then 3 lots would be 150 units, and an order for 120 units would be refused.
Also called: Trading margin, Collateral, Margin money
The money or approved collateral you must keep with your broker to open and hold a position, instead of paying its full value.
For F&O, the minimum margin is set by the exchange's clearing corporation, mainly as SPAN plus exposure margin. Approved shares can be pledged with your broker as collateral towards margin. If your funds fall short of the margin needed, the broker can refuse new orders or square off positions.
A demand from your broker to add funds, because the money in your account no longer covers the margin your positions need.
Margin requirements can rise during the day, and losses reduce your available funds. If the shortfall is not covered, the broker's risk team may square off positions to bring the account back within limits. Exchanges can also charge penalties for margin shortfalls, and brokers may pass these on to you.
A live view of the best buy and sell prices waiting at the exchange, and the quantity at each one.
Most broker apps show the best few bid and ask levels for a stock or contract, often five on each side. Depth helps you see how much could trade near the current price before the price has to move. It changes constantly, and any order shown can be cancelled at any moment.
An order to buy or sell immediately at the best price currently available, whatever that price is.
A market order fills almost at once in an actively traded stock or contract, but you do not control the price. In a fast move, or in a thinly traded option, it can fill well away from the last price you saw. For this reason some software sends limit orders instead: MyAlgoMate's Copy Trading Software, for example, copies a market order as a limit order priced from your own settings.
Also called: Parent account, Leader account, Main account
In copy trading, the one account you actually trade in, whose orders are copied into all the child accounts.
The master is usually the account you already trade, through your broker's terminal, its app, or your own algo. The copy trading software watches its order book and copies each new order, along with changes such as a new limit or trigger price. An order rejected in the master is not copied, because there is nothing to copy.
Also called: Maximum loss, Daily loss limit, Loss limit
A risk setting that squares off positions when MTM falls to the loss figure you set.
Max Loss is a limit you choose in advance, not a promise about how much you can lose: in a fast market, the actual exit can be worse than the figure set. In TradeBridge it can be set per strategy, per account and across all accounts, and whichever limit triggers first acts. In Copy Trading Software, an account that reaches its Max Loss is squared off and taken out of copying for the rest of the session.
Also called: Max profit limit, Account-level target
A risk setting that squares off positions when MTM reaches the figure you set.
Max Profit is an exit rule, not an expected result: it says what the software should do if MTM reaches a level, and nothing about whether it will. It runs alongside Max Loss, so a strategy or account is closed by whichever figure is reached first. In TradeBridge it can be set per strategy, per account, and on the combined MTM of all accounts.
An Indian commodity derivatives exchange, where futures and options on gold, silver, crude oil, natural gas and metals trade.
MCX trades from morning until late at night, long after equity markets close, so commodity strategies usually need a different exit time. Most options on MCX are written on the commodity's futures contract rather than on its spot price. Like NSE and BSE, MCX is regulated by SEBI.
Also called: Intraday, MIS product, Intraday product type
The product type for intraday trades, which your broker automatically squares off before the market closes if you have not.
MIS positions must be closed the same day. Each broker sets its own auto square-off time, usually shortly before the close, and some charge a fee for doing it. Depending on the broker, MIS can be used for equity, F&O and commodities, and some brokers simply call it "Intraday".
Also called: Mark to market, MTM, M2M, Running P&L
The current value of your open positions compared with their entry price, updated live as prices move.
MTM shows where open positions stand right now, before they are closed. Risk settings such as Max Loss and Max Profit act on MTM, at the level of a strategy, an account, or all accounts together. In futures, MTM also has a formal meaning: the clearing corporation settles each day's change in value in cash, day by day.
Also called: Diwali Muhurat trading, Muhurat session, Diwali special session
A short, special trading session that Indian exchanges hold on Diwali to mark the start of the new Samvat year.
Diwali is otherwise a trading holiday, and the Muhurat session is a token session held on that day. The exchanges announce its exact timing each year, so check it rather than assume it. Trades in the session are normal trades with normal settlement, and any automated setup with fixed start and exit times needs adjusting for the unusual hours.
Also called: A/C multiplier, Quantity multiplier, Account multiplier
A per-account number that scales the quantity copied or traded: 2 doubles it, and 0.5 halves it.
Multipliers let one set of orders suit accounts of different sizes. In F&O the result must land on a whole lot, so the software rounds part lots up or down, as you choose. Decimal multipliers can leave small leftover quantities if you exit in parts or add to a position in stages.
Example · With a multiplier of 1.4 and rounding up, a master order of 2 lots of 50 units becomes 150 units (3 lots) in the child account.
Also called: Normal, Carry forward, Overnight F&O, NRML product
The product type for futures and options positions you want to hold overnight or until expiry.
NRML positions are not squared off automatically at the end of the day, so they need the full exchange margin for as long as they stay open. It is used in the F&O, currency and commodity segments; the equity-delivery equivalent is CNC. Some brokers label it "Carry forward" or "Overnight".
One of India's two main stock exchanges, based in Mumbai and home to the Nifty 50 index.
NSE runs equity, F&O, currency and commodity segments. Options on the Nifty 50, Bank Nifty and other indices trade here, along with stock futures and options. In trading software, NSE's equity segment is usually coded NSE and its F&O segment NFO.
The total number of futures or options contracts that are still open: traded, but not yet closed or settled.
OI rises when a new buyer and a new seller open a contract together, and falls when existing holders close their positions. It is different from volume, which counts every trade made during the day. OI is shown for each strike on the option chain, and exchanges also use it to decide when a stock enters the F&O ban period.
A table of all the call and put options for one underlying and expiry, listed strike by strike.
Calls usually sit on the left, puts on the right, and strikes down the middle. For each strike you can see the premium, change, volume, open interest, and often IV and Greeks. Trading software uses the live option chain to pick strikes at the moment a signal fires, for example by premium or by delta.
Measures (delta, gamma, theta and vega) that describe how an option's price reacts to changes in price, time and volatility.
Each Greek isolates one force: delta for the underlying's price, gamma for how delta itself shifts, theta for time passing, and vega for changes in implied volatility. They are estimates from a pricing model, not exact predictions, and they change through the day. Many option chains and trading tools show them next to each strike.
The price of an option: what the buyer pays and the seller receives.
Premium is quoted per unit, so the amount involved is the premium times the lot size. It is made up of intrinsic value plus time value, and it moves with the underlying's price, the time left to expiry and implied volatility. An option buyer's maximum possible loss is the premium paid plus charges, while a seller's possible loss is not limited in the same way, which is why sellers must post margin.
Example · If a call's premium is ₹120 and the lot size were 50, buying one lot would cost ₹6,000 plus charges.
Also called: Options, Option, Index options, Stock options
A contract that gives its buyer the right, but not the duty, to buy (call) or sell (put) the underlying at a set price by expiry.
The buyer pays a premium for that right. The seller, also called the writer, receives the premium and takes on the duty to honour the contract, which is why sellers must post margin. On NSE and BSE, options are European-style, which means they can only be exercised at expiry.
The list of every order you placed today, with its status: open, complete, cancelled or rejected.
Your broker's order book shows each order's price, quantity, filled quantity and status, plus the reason if it was rejected. It is the first place to look when something did not go as expected. The exchange also keeps a book of all pending orders from everyone, which is what market depth shows. Copy trading software watches the master account's order book to know when to copy an order.
When your broker or the exchange refuses an order, so it never becomes a trade.
Common reasons include not enough margin, a price outside the allowed band, a quantity above the freeze limit, a stock in the F&O ban period, or an IP address the broker has not registered. The order book shows the exact reason in the broker's own words. Execution software can be set to retry a rejected order or to stop, depending on your settings.
Also called: Auto order slicing, Order splitting, Split order
Splitting one large order into several smaller ones, each below the exchange's freeze quantity, so none is refused.
If an order is larger than the freeze quantity, the exchange refuses the whole order. Slicing cuts it into pieces that each fit under the limit and sends them all. It matters most when a multiplier or position size pushes one account's quantity over the cap. Each slice is its own order, so the slices can fill at slightly different prices.
Example · If a contract's freeze quantity were 1,000 units and you needed 2,500, the order would go out as three slices: 1,000, 1,000 and 500.
Also called: Out of the money, OTM option, Far OTM
An option with no intrinsic value: a call with a strike above the current price, or a put with a strike below it.
An OTM option's whole premium is time value, so it costs less than ATM or ITM options of the same expiry. If it is still OTM at expiry, it expires worthless. Far OTM options are often thinly traded, which can mean wide bid-ask spreads and more slippage.
Example · With the underlying at 24,000, a 24,300 call and a 23,700 put are both out of the money.
Also called: Paper trade, Simulated trading, Virtual trading, Paper mode
Running trades in simulation, with no real orders sent to your broker, to check how a setup behaves.
In paper trading, signals still arrive and positions and exits still appear on screen, but nothing reaches your broker and no money moves. It lets you test settings, alerts and workflows before going live. Paper fills are simulated, so they can differ from real fills, especially in thinly traded contracts.
Also called: Partially filled order, Partial execution
When only part of your order's quantity has traded, and the rest is still waiting or has been cancelled.
A partial fill happens when there is not enough quantity available at your price. The filled part becomes a position straight away; the rest stays open until it fills, you cancel it, or the session ends. In multi-account or multi-leg setups, partial fills are one reason accounts or legs can end up holding different quantities.
TradingView's own programming language for writing custom indicators, strategies and alert conditions.
Pine Script runs on TradingView's servers, on the charts you open there. You can use it to build an indicator, backtest a strategy on TradingView's data, or define the exact condition for an alert. When that alert has a webhook URL, a Pine Script condition can trigger orders in execution software.
Also called: Portfolio Management Services, PMS mode, Portfolio manager
A SEBI-registered service in which a licensed portfolio manager manages a client's money; in some software, also a one-order-to-many-accounts mode.
In regulation, PMS means a portfolio manager registered with SEBI who invests on behalf of clients. In trading software the term is also used loosely: MyAlgoMate's Copy Trading Software has a "PMS mode" that sends one order from your market watch into many of your accounts at once, with no master account involved. That feature is an order-placing tool only; it is not a portfolio management service.
What you currently hold, or owe, in a stock or contract after your trades, until you close it.
Buying 50 units of a contract gives you a long position of 50; selling those 50 closes it. A position stays open until you square it off, it expires, or a stop-loss or risk rule exits it. Your broker's positions screen shows each open position with its quantity, average price and current MTM.
Also called: Quantity sizing, Capital-based sizing, Lot sizing
Deciding how much to trade, in shares or lots, for each position.
Sizing can be a fixed number of lots, an amount based on capital, or a figure worked out from how far away the stop-loss is. Size decides how much a given price move changes your MTM, so it is a core part of managing risk. When the same strategy runs on accounts of different sizes, a per-account multiplier keeps each one in proportion.
Also called: Pre-market session, Call auction, Pre-open
A short session before the regular market opens, where orders are collected and matched at a single opening price.
In the equity cash market, the pre-open runs in the 15 minutes before the 9:15 am start. Orders are collected first, then matched at the price where the most quantity can trade, and that becomes the opening price. After-market orders placed the evening before usually enter during this session.
A risk setting that, once MTM reaches a level you choose, sets an MTM exit level and can move that exit level up as MTM rises.
You set the MTM level at which it starts, the MTM level to exit at from then on, and, if you want, how that exit level moves as MTM rises further. If MTM falls back to the exit level, the positions are squared off. It is an exit rule that acts on levels you set; it does not change what the market does, and in a fast move the exit can come at a worse level.
A contract that gives the buyer the right, but not the duty, to sell the underlying at the strike price by expiry.
The put buyer pays a premium; the seller receives it and takes on the duty to honour the contract. "PE" in a contract name stands for Put European. All else being equal, a put's price tends to rise when the underlying falls.
Also called: Python algo trading, Python trading bot
A popular, readable programming language widely used to write trading strategies, backtests and broker API connections.
Many brokers offer official or community Python libraries for their APIs, which make it easier to log in, read prices and place orders from code. Python is also common for data analysis and backtesting. A Python strategy can send its decisions straight to a broker API, or hand them to execution software through a webhook or JSON API.
A comparison of how far a trade's stop-loss is from its entry against how far its target is.
It is written like 1:2, meaning the distance to the target is twice the distance to the stop-loss. The ratio describes a plan, not an outcome: it says nothing about how often a target is actually reached. Costs such as brokerage and slippage also change the real numbers.
Example · Entry at 100, a stop-loss at 95 and a target at 110 give 5 points of risk against 10 points to the target: a 1:2 risk-reward ratio.
Also called: RMS, Risk management system, RMS rejection, RMS settings
The set of automatic checks and limits that decide whether an order may go through and when positions must be closed.
At your broker, the RMS checks every order against your margin, position limits and the exchange's rules before it reaches the market; an order it refuses is often called an RMS rejection. In trading software, "RMS settings" usually means your own risk limits, such as Max Loss, Max Profit and an exit time, applied to a strategy, an account or all accounts.
Closing a position in the current expiry and opening the same position in a later expiry.
Rollover is most common in futures near monthly expiry, when traders who want to keep a position move it to the next month's contract. Because the two contracts trade at different prices, the roll is done at a price difference called the roll spread. In options, "rolling" can also mean moving a position to a different strike in the same expiry.
Also called: Stock scanner, Screener, Stock screener
A tool that searches the market for stocks matching conditions you set, such as a price level, volume or indicator value.
A scanner runs your conditions across many stocks at once and lists the matches. Some scanners run continuously during market hours and can send an alert when a new stock matches. A scanner only filters by your rules; it does not judge whether a match is worth trading.
Also called: Securities and Exchange Board of India
The Securities and Exchange Board of India: the regulator for India's securities and commodity derivatives markets.
SEBI was given statutory powers under the SEBI Act, 1992. It sets the rules for stock exchanges, brokers, depositories, investment advisers, research analysts and portfolio managers, including the rules for algorithmic trading by brokers and their clients. Since 2015 it has also regulated commodity derivatives, after the Forward Markets Commission was merged into it.
The process that completes a trade: the buyer's money and the seller's shares are exchanged through the clearing corporation.
Settlement happens on a fixed cycle after the trade date. On settlement day, the clearing corporation collects funds and securities (pay-in) and delivers them to the other side (pay-out). For Indian equity cash trades, the cycle is T+1.
A day when the exchange may be open for trading but no settlement takes place, usually because banks are closed.
If a settlement holiday falls within the cycle, pay-in and pay-out move to the next working day. That can delay when shares you bought reach your demat account, or when money from a sale can be withdrawn. Exchanges publish settlement holidays alongside trading holidays.
Also called: Trade signal, Entry signal, Exit signal
A message that says "act now", to enter or exit a trade, produced by a rule, a scanner, an alert or your own code.
A signal is the trigger for an order. It can come from a Chartink scan, a TradingView alert, a Python script or a spreadsheet. Execution software then turns the signal into actual orders at your broker. MyAlgoMate's software does not create signals or tell you what to trade; it carries out the signals you send it.
The difference between the price you expected when you placed an order and the price it actually filled at.
Prices move while an order travels to the exchange, and there may not be enough buyers or sellers at your price. Slippage is usually larger in fast markets and in thinly traded contracts, such as far out-of-the-money options. Limit orders cap how far the fill price can move, but they may then fill only partly or not at all.
Example · You see a last price of ₹100.00 and send a market buy order; it fills at ₹100.40. The ₹0.40 gap is slippage.
The main part of F&O margin, worked out by the exchange's risk system across a range of possible one-day price and volatility moves.
SPAN stands for Standard Portfolio Analysis of Risk. It looks at your whole F&O portfolio together, so offsetting positions, such as a hedged option sale, can need less margin than each would alone. Exchanges add an exposure margin on top, and together they make up the initial margin your broker collects. The figures are updated several times during the trading day.
Also called: Bull call spread, Bear put spread, Calendar spread, Vertical spread
A position made by buying one option and selling another on the same underlying, at different strikes or expiries.
In a vertical spread, both options share an expiry but have different strikes, as in a bull call spread or a bear put spread. In a calendar spread, both share a strike but have different expiries. Because one leg offsets part of the other, a spread usually needs less margin than a single sold option. The word "spread" is also used for the bid-ask gap and for the price gap between two futures contracts.
Also called: Square-off, Auto square-off, Close a position, Exit position
Closing an open position by placing the opposite trade: selling what you bought, or buying back what you sold.
Square-off is how a position ends before expiry or delivery. Brokers also auto square-off intraday (MIS) positions shortly before the close if you have not done it yourself, and some charge a fee for this. Trading software can square off at an exit time you set, or when a risk limit is reached.
Also called: Static IP, Fixed IP, IP whitelisting, Registered IP
An internet address that stays the same every day, which many Indian brokers ask you to register before they accept API orders.
Most home internet connections get a new IP address from time to time; a static IP never changes. Many Indian brokers now accept API orders only from an IP address you have registered with them. Some refuse the login if the IP is wrong, while others accept the login and then reject every order. If you run several accounts, each one needs the IP registered with its own broker.
Also called: Broker, Trading member, Discount broker, Full-service broker
A SEBI-registered firm that is a member of the exchanges and places your orders on your behalf.
Every trade in India goes through a broker, including trades placed by algo software, which connects through the broker's API. Discount brokers mainly offer execution, while full-service brokers also offer research and advice. Your broker also runs the RMS checks, collects margin and sends your contract notes.
A pre-decided exit level that closes a position if the price moves against you by the amount you chose.
A stop loss can be set in points, as a percentage or as an absolute price, and it can sit inside your software or as an SL order at your broker. It caps how far you plan to let a position run against you, but it does not promise an exit at exactly that price: gaps and fast moves can mean a worse fill. A stop placed at the broker keeps working even if your own machine goes offline.
An order that waits for a trigger price, then goes to the exchange as a market order.
SL-M has a trigger price but no limit price. Once triggered, it fills at the best price available, so it usually fills quickly, but the fill price is not fixed and can be well beyond the trigger in a fast move. Some brokers and exchanges restrict SL-M orders in certain contracts, such as options.
Also called: SL order, Stop-loss limit order, SL-L, Stop order
An order that waits until the price touches a trigger you set, then goes to the exchange as a limit order.
An SL order has two prices: the trigger price and the limit price. Until the trigger is touched, it waits without trading; once triggered, it becomes a limit order at your limit price. If the price jumps past your limit, the order can stay unfilled, which is why the limit is usually set a little beyond the trigger.
Example · You hold a long position bought at ₹100 and place a sell SL with a trigger of ₹95 and a limit of ₹94.50. If the price falls to ₹95, a sell limit order at ₹94.50 goes to the exchange.
Also called: Long straddle, Short straddle, ATM straddle
Buying or selling a call and a put together, at the same strike and expiry, usually the ATM strike.
A long straddle buys both options; a short straddle sells both. The straddle's combined premium is often watched as a measure of how much movement the market is pricing in. In trading software, a straddle is simply two legs placed together, with the strike usually chosen at the moment of entry.
Buying or selling a call and a put together on the same expiry, but at different strikes, usually both out of the money.
A strangle is like a straddle with the two strikes pulled apart. Because both options are usually OTM, the combined premium is lower than an ATM straddle's. A long strangle buys both options; a short strangle sells both, which needs margin.
Also called: Trading system, Algo strategy, Trading rules
A complete set of rules for what to trade, when to enter, how much to trade and when to exit.
A strategy pulls together entry rules, exit rules, position size and risk limits. In trading software, a "strategy" is often also a group of settings: the instrument, the legs, the time window, and the stop-loss and target that apply. MyAlgoMate provides the software to run strategies; choosing and judging a strategy is always the trader's own decision.
The fixed price at which an option lets its holder buy (call) or sell (put) the underlying.
Exchanges list many strikes for each expiry, at set intervals around the current price. Whether a strike is ATM, ITM or OTM depends on where the underlying is trading right now. Trading software can pick a strike in several ways, such as by distance from ATM, by premium or by delta, at the moment a signal arrives.
Also called: Securities Transaction Tax, CTT, Commodities Transaction Tax
A tax the Government of India charges on buying and selling securities on a recognised stock exchange.
STT is collected through your broker and the exchange, and it is shown on your contract note. The rate depends on the segment and on whether you are buying or selling, and the government revises it from time to time, often in the Union Budget. Non-agricultural commodity derivatives carry a similar tax called CTT.
A trading API platform from Symphony Fintech that many Indian brokers use to offer API access to their clients.
Instead of building their own API, many brokers license XTS, which provides an order-placing (interactive) API and a market data API. For algo software, this means the same kind of connection works across many different brokers. Each broker still issues its own XTS keys and sets its own access rules.
A position or price built from a call and a put at the same strike and expiry, which behaves like a futures contract.
Buying a call and selling a put at the same strike and expiry creates a synthetic long future; doing the reverse creates a synthetic short. The synthetic price is worked out roughly as strike + call premium - put premium. Some trading software uses this price, instead of spot or the actual future, as the reference for choosing strikes.
Settlement on the next working day after the trade date: the standard cycle for Indian equity cash trades.
T is the trade date, and +1 means one working day later. If you buy shares for delivery on Monday, they are normally credited to your demat account on Tuesday, and money from a sale follows the same schedule. India completed its move to T+1 for all listed equities in January 2023. Weekends and settlement holidays are not counted as working days.
A pre-set exit level on the favourable side of your entry, at which the position is closed.
Like a stop loss, a target can be set in points, as a percentage or as a price, for one leg or for a whole strategy. When the price or MTM reaches it, the software or a waiting limit order exits the position. A target is a plan for when to exit, not a forecast that the price will get there.
Also called: Indicator, Moving average, RSI, MACD, VWAP
A calculation based on past price and volume, such as a moving average or RSI, shown on a chart or used in a scan.
A moving average smooths price over a set number of candles, RSI measures the speed of recent price changes on a 0 to 100 scale, and VWAP is the day's average price weighted by volume. Indicators describe what price has already done; they do not predict what it will do. Scanners, alerts and Pine Script strategies are often built from indicator conditions.
How much an option's price tends to fall each day as time passes, if nothing else changes.
Options lose time value as expiry approaches, and theta measures that daily decay. All else being equal, time decay reduces an option's value for its holder and has the opposite effect for its seller. The decay is usually faster close to expiry, especially for ATM options.
The part of an option's premium above its intrinsic value: what is paid for the chance the price moves before expiry.
Time value depends on how long is left until expiry and on implied volatility. It shrinks as expiry approaches and is zero at expiry. The premium of an OTM or ATM option is made up entirely of time value.
Also called: TOTP, 2FA, Authenticator code, Time-based OTP
A second login check on top of your password, usually a 6-digit code from an authenticator app that changes every 30 seconds.
Two-factor authentication means logging in with something you know (your password) and something you have (your phone). TOTP stands for time-based one-time password: an authenticator app makes a fresh code every 30 seconds from a secret key set up with your broker. Indian brokers ask for 2FA when you log in, and many API logins need a TOTP code too. Treat the TOTP secret like a password, because anyone who has it can generate your codes.
The list of your orders that actually executed today, with the price, quantity and time of each fill.
The order book shows every order; the trade book shows only what traded. One order can appear as several trades if it filled in parts. Your contract note for the day is built from these trades.
A weekday on which the exchanges are closed and no trading takes place.
NSE and BSE publish their trading holidays for the coming year in advance, and MCX may follow a slightly different list, sometimes opening only for an evening session. When an expiry date falls on a holiday, it usually moves to the previous trading day. Automated setups need the holiday list so they do not wait for signals on a closed day.
A web-based charting platform with indicators, Pine Script and alerts that can send webhook messages to other software.
Traders use TradingView to chart Indian and global markets, write Pine Script, and set alerts on almost any condition. On paid plans, an alert can call a webhook URL with a message you write, often in JSON. Execution software such as TradeBridge receives that message and turns it into broker orders.
Also called: TSL, Trailing SL, Trail, Trailing stop
A stop loss that moves along with the price when it goes your way, but never moves back.
You set a step: for every X points the price moves in your favour, the stop moves Y points with it. If the price then turns and reaches the trailed stop, the position is exited. Like any stop, the exit can be worse than the stop level in a fast or gapping market.
Example · With an X/Y of 10/5, a long position's stop moves up 5 points each time the price rises another 10 points.
The price that wakes up a waiting order, such as a stop-loss or GTT, and sends it to the exchange.
Until the market touches the trigger price, the order does nothing. When it does, the order is released: as a limit order for SL and GTT orders, or as a market order for SL-M. For a sell stop-loss the trigger sits below the current price; for a buy stop-loss it sits above.
The index, stock or commodity whose price a futures or options contract is based on.
For a Nifty option the underlying is the Nifty 50 index; for a gold future on MCX it is gold. The underlying's current market price is called the spot price. On MCX, most options are written on the commodity's futures contract, so that future acts as the reference price.
How much of the time a system is running and reachable, which for trading software means the whole market session.
An algo setup is only as reliable as its weakest link: the machine, the internet connection, the software and the broker's API all need to be up. If the machine sleeps, restarts for updates or loses its connection, signals that arrive during that time can be missed. This is why execution software is often run on a cloud server rather than a home PC.
How much an option's price changes for a one-point change in implied volatility.
When IV rises, option premiums usually rise too, and vega measures by how much. Vega is larger for options with more time left until expiry. Option buyers have positive vega and option sellers have negative vega.
Also called: Virtual private server, Cloud server, Cloud machine, Windows VPS
A computer you rent in a data centre and control over the internet, so trading software can run all day without your home PC.
A VPS stays switched on, does not sleep, and keeps the same public IP address, which matters for webhooks and broker IP registration. You connect to it from your own computer with Remote Desktop and run the software there. TradeBridge, for example, is a Windows application meant to run on a Windows cloud machine, because its signal listener has to be reachable for the whole trading day.
A web address that one app calls automatically to send a message to another app the moment something happens.
Instead of your software repeatedly asking "has anything happened yet?", a webhook lets the other side push a message the instant an event occurs. In algo trading, you paste a webhook URL into a Chartink or TradingView alert; when the alert fires, it sends a message to that URL, and execution software turns it into orders. Anyone with the URL could send it a message, so keep it private.
Example · In TradeBridge, each strategy gets an entry URL and an exit URL. Paste the entry URL into a TradingView alert, and that alert becomes an entry trigger.
These definitions are for education only. They are not investment advice or a recommendation to use any strategy. Exchange and SEBI rules change from time to time — check the latest circulars for exact numbers such as lot sizes and margins.
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