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Market Intelligence › Basic Terminologies
Bid-ask, limit vs market, SL-M, slippage, open interest — read this before you press the button
Published by The Retail Trader · AUG 05, 2026 · Order Flow
No matter how good the analysis, the money is made after the order button. And that is where the most mistakes happen: the wrong order type, the wrong trigger price, or an entry at a place where there was no liquidity. This is the complete language of the order — from the order book to execution.
This is what is going on inside the depth window that opens on your screen:
• Bid — The highest price at which someone is ready to buy right now.
• Ask / Offer — The lowest price at which someone is ready to sell right now.
• Bid-Ask Spread — The difference between the two. In a liquid stock it is about a paisa, in an illiquid one it is quite large — and that is your hidden cost.
• Market Depth — The list of pending quantity on the bid and ask sides, usually of the top 5 (or 20) levels.
• Order Book — The live record of all pending orders on the exchange.
• Matching Engine — The exchange system that matches buy and sell orders.
• Price-Time Priority — The better price goes first; at the same price, the order that came first goes first. That is why the time of a limit order matters too.
• Last Traded Quantity — How much quantity went through in the last trade, which shows whether the action was small or large.
• Bid-Ask Imbalance — Much more quantity on one side, which is taken as a hint of short-term pressure.
Every order type has a trade-off: either you get control of the price, or a guarantee of execution — not both together:
• Market Order — Executes immediately at the best price available right now. Execution is certain, the price is not.
• Limit Order — You fix the price. The price is yours, but there is no guarantee of execution.
• Stop Loss (SL) Order — Activates at the trigger price and becomes a limit order, so that the loss stops at one point.
• SL-M (Stop Loss Market) — Becomes a market order as soon as it triggers. In a fast market it does execute, but you may get a poor price.
• Trigger Price — The price at which your pending SL order comes alive. Do not confuse it with the limit price.
• Bracket Order — Entry, target and stop loss in one place — all three together.
• Cover Order — A compulsory stop loss along with the entry, in return for which the broker gives more intraday leverage.
• GTT (Good Till Triggered) — A long-lived trigger that sends an order when the condition is met.
• AMO (After Market Order) — An order placed after the market closes, which goes into the queue at the next day's open.
• IOC (Immediate or Cancel) — Whatever can be filled immediately, and the rest is cancelled.
• Day Order — Valid only for that day; cancelled automatically in the evening.
• Disclosed Quantity / Iceberg — Showing a big order in small pieces, so the market does not learn the full size.
Along with the order, you have to decide what form the position will take:
• MIS (Intraday) — The position is squared off the same day, and the broker gives leverage.
• CNC (Delivery) — The full amount is paid, the shares come into the demat, and you can keep them as long as you like.
• NRML — A normal-margin overnight position for F&O.
• Margin — The money that gets blocked to take a position, especially in leveraged products.
• Leverage — The facility of taking a position larger than your capital. Profit is multiplied, and so is loss.
• Square Off — Closing a position: selling a long or buying back a short.
• Auto Square-Off — If you do not close an intraday position, the broker closes it by itself at the cut-off time, and a charge is applied for that too.
• Short Selling — Selling first, hoping to buy back cheaper later. In equity, this is generally allowed only intraday.
• Open Position — A position that has not yet been closed.
• MTM (Mark to Market) — The profit or loss of your open position at the current price, which keeps updating live.
• Averaging — Adding more quantity to a position. This increases risk — whether you average up or down.
• Carry Forward — Holding a position to the next day, for which the full overnight margin is needed.
The things that do not show up in a backtest but do show up in a live account:
• Slippage — The difference between the price you expected and the price you actually got. It is largest in a fast market.
• Partial Fill — Only a part of the order being executed, with the rest left pending.
• Impact Cost — How much your own order moves the price. It rises with large size and thin liquidity.
• Illiquid Stock — A stock with low volume, where you can get in but getting out is difficult.
• Freeze Quantity — The maximum quantity allowed in a single order; for more than that, the order has to be split and sent.
• Order Rejection — Low margin, a circuit being hit, or a wrong trigger price — all common reasons for rejection.
• Contract Note — The broker's statement at the end of the day, listing every trade, every charge and the net obligation.
• Peak Margin — Margin being checked at random snapshots during the day; a penalty can apply if it falls short.
And finally, the data that tells you what big participants are doing:
• Volume Profile — The distribution of volume against price, which shows at which level the most business was done.
• POC (Point of Control) — The price at which the most volume traded; a magnet-like level.
• Value Area — The range in which roughly 70% of the day's volume traded.
• Open Interest (OI) — How many contracts are currently open in F&O. Volume shows activity, OI shows commitment.
• Long Buildup — Price up and OI up: new long positions are being built.
• Short Buildup — Price down and OI up: new short positions are being built.
• Long Unwinding — Price down and OI down: old longs are exiting.
• Short Covering — Price up and OI down: shorts are closing their positions.
• FII / DII Data — Data published daily on how much the foreign and domestic institutions bought and sold in the cash market.
• Bulk Deal / Block Deal — Large deals reported on the exchange, which show whether a big player is entering or exiting.
• Delivery Percentage — Out of the traded quantity, how much actually went into delivery. High delivery means buying with conviction.
The names of the terminal tabs, which differ slightly on every broker but mean the same thing:
• Order Book — All of today's orders and their status: open, executed, rejected, cancelled.
• Trade Book — Only the orders that actually executed, with their real fill price.
• Position Book — The currently open positions, their average price and live P&L.
• Holdings — Shares lying in the demat, which were bought for delivery.
• Realised P&L — The profit or loss that has become final after closing a position.
• Unrealised P&L — The paper profit or loss of an open position right now. It is only a number until it is booked.
• Funds / Ledger — Available cash, used margin and withdrawable balance.
• Margin Available vs Margin Used — How much is left and how much is already blocked.
• Basket Order — Preparing several orders together and sending them in one click, such as a multi-leg option strategy.
• GTT Trigger Book — The pending long-term triggers that have not become active yet.
• Price Alert — A notification at a level, without placing an order. The best alternative to sitting at the screen.
• Order Modification — Changing the price or quantity of a pending order. This resets your time priority in the queue.
Many times an order is rejected not because of your broker but because of an exchange rule:
• Tick Size — The smallest allowed step of price. An order at a price in between will not even be accepted.
• Price Band — The price range allowed within a day. A limit order outside it gets rejected.
• Series — A stock's segment code: EQ is normal rolling settlement, while BE and BZ are restricted, where intraday is not allowed.
• Trade-to-Trade (T2T) — A segment where every trade settles in delivery only; intraday square-off is not possible.
• ASM / GSM — Surveillance frameworks; stocks that fall under them face extra margin and trading restrictions.
• Short Delivery — Sold, but unable to deliver. The exchange buys those shares in an auction and delivers them, and the penalty falls on the seller.
• Auction Session — The same settlement auction, where short delivery is made good.
• Call Auction — A special mechanism of price discovery for illiquid stocks and the pre-open.
• Close-Only Restriction — A position in which only exit is allowed, not new entry.
• Circuit Freeze — In a stock that has reached the upper or lower circuit, one side of the order book becomes completely empty — theoretically an order can be placed, practically it does not execute.
• Settlement Holiday — A day when the market is open but there is no settlement; this changes the payout timing.
The choice of order type is part of the strategy, not a formality. A market order in an illiquid stock and a position without an SL on a volatile expiry — both cost more than the analysis ever earns.
This journal is for educational purposes only — it is not a buy or sell recommendation. Charges, margins, lot sizes and expiry rules are changed by the exchange from time to time, so always verify the final numbers with your broker or the exchange.