1 Answer

Trigger price is the price, which if touched, activates an order.

Suppose you are long on a stock at 102.

You don't want a loss of more than Rs. 1.

So you put a stop loss sell order of Rs 101 with a trigger price of Rs 101.05.

What the system (exchange) does is - it checks if the LTP (Last Traded Price) is less than or equal to Rs 101.05.

As soon as the condition is met, the exchange will put your Rs 101 sell order in the normal order book.

Unless the LTP goes below or is equal to the trigger price, a stop loss trigger sell order is not activated.

Similarly Unless the LTP goes above or is equal to the trigger price, a stop loss trigger buy order is not activated.

Thus a trigger order has two components - trigger price and the price at which the order is placed.

A trigger order may also be a market order. This means if triggered, the trade will take place at market price.