Glossary
Stop Loss vs GTT
Orders used to exit a trade automatically at a specific price to limit losses.
Simple explanation
Stop Loss (SL): An intra-day or valid-for-day order to sell if price hits X.
GTT (Good Till Triggered): A long-standing order (valid for 1 year) mainly used by Zerodha/Groww.
GTT is better for long-term investors or swing traders who don't watch the screen daily.
On NSE and BSE, a regular stop-loss order expires at 3:30 PM on the same day. This means if you are a long-term investor and set a stop loss today, it vanishes tomorrow morning. You would need to place it again every single day, which is impractical. That is exactly the problem GTT orders solve.
GTT orders on Zerodha remain active for up to one year. You can set a GTT the day you buy a stock and forget about it. If the stock hits your trigger price anytime in the next 12 months, the order activates and sells your shares automatically from your demat account.
One important limitation: GTT orders are not exchange-level orders. They are stored on your broker's server. If the broker's system faces downtime during a flash crash, your GTT might not trigger instantly. For very large portfolios, some investors prefer using put options as a hedge instead of relying solely on GTT.
A smart strategy used by many Indian swing traders is the 'OCO' (One Cancels Other) GTT on Zerodha. You can set two triggers, one above your buy price (profit target) and one below (stop loss). Whichever hits first executes, and the other is cancelled automatically.
Real-world example
You buy Infosys at ₹1,500 on NSE for long-term holding in your demat account. You set a GTT sell order at ₹1,350 (10% stop loss) and another GTT at ₹1,800 (20% profit target) on Zerodha. Three months later, Infosys reports weak results and drops to ₹1,350. Your GTT triggers automatically, selling your shares and limiting your loss to ₹150 per share. Without the GTT, you might have held on hoping for a recovery, only to watch it fall to ₹1,200.
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