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Price fluctuation guard for your Market orders: Market price protection (MPP)2 min read

March 18, 2024

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Price fluctuation guard for your Market orders: Market price protection (MPP)2 min read

Have you ever experienced problems with the execution when placing a market order? Have you ever wondered why your market order is sent as a limit order? Have you ever worried about price volatility while placing a market order? Then this blog explaining Market Price Protection (MPP) is for you.

How is my market order sent as a limit order?

Imagine you’re shopping in a highly volatile market where prices can jump unexpectedly. If you want to buy something for ₹100, but the sellers are asking ₹600, you could end up losing ₹500 – not cool! But fear not, your Market orders are protected with a superhero move called market price protection (MPP).

Let’s understand this with an example:

Picture this: you try to buy at ₹100, and a 2.5% protection shield kicks in. Your order turns into a limit order at ₹102.5, ensuring you don’t pay more in case of a sudden jump in price. If sellers agree to sell for less than ₹102.5, great, your order goes through. If not, it stays put like a regular order, valid for a day.

Similarly, if you try to sell for ₹100, then with the 2.5% price protection, your order will be converted to a limit order of ₹97.5 making sure you don’t get less than ₹97.5 for your sell transaction even in adverse price movements.

 It’s like having a safety plan for your money moves! 💸✨

Why do you need Market Price Protection?

MPP is like having an extra layer of security for your money moves in the market. It ensures that your trades stay safe if the market gets a bit volatile. It’s like a safety net to keep you from losing money unexpectedly. MPP is your sidekick, making sure your financial journey in the market is a bit smoother and less risky. 🌐

You can refer to the NSE circular regarding market orders to go with Market price protection: Pre-Trade risk controls – Market Price Protection

Happy and Safe Trading with this added shield!

Disclaimer: Investments in the securities market are subject to market risks, read all the related documents carefully before investing. This content is purely for information purposes only and in no way to be considered as advice or recommendation. Paytm Money Ltd SEBI Reg No. Broking – INZ000240532, Depository Participant – IN – DP – 416 – 2019, Depository Participant Number: CDSL – 12088800, NSE (90165), BSE (6707) Regd Office: 136, 1st Floor, Devika Tower, Nehru Place, Delhi – 110019. For complete Terms & Conditions and Disclaimers visit: https://www.paytmmoney.com/stocks/policies/terms