Market Price Protection is a trading safeguard that converts a market order into a limit order if the execution price moves outside a pre-defined protection range. It helps clients avoid execution at unexpectedly high or low prices due to sudden volatility or low liquidity.

Why it is important?

Unlike a regular market order (which can be filled at any price), Market Price Protection ensures:

• Immediate execution only within a price tolerance range
• Protection against sharp price fluctuations
• Avoidance of slippage or unintended execution prices

How It Works

• Client places a market order with protection enabled.
• System calculates a protection price using a percentage based on the Last Traded Price (LTP).
• Order tries to fill immediately within the protection range.
• If full execution doesn’t occur, remaining quantity becomes a limit order at the protection price.

Illustrative Price Protection Table (This can change from time to time for each exchange)

Example Scenario

• Stock Price: ₹90
• Order Type: Market Buy, 100 shares
• Protection %: 2% (because price < ₹100)
• Protection Price: ₹90 + (2% of ₹90) = ₹91.80
• Execution:
  • Shares will be bought at any price ≤ ₹91.80
  • If 100 shares are not filled, remaining will stay as a limit order at ₹91.80