Two ways to hold a position
When you place an order in an Indian trading terminal you choose a product type. It tells the system whether the position is meant to close today or may be carried to another day. IndieFunded's simulator supports both.
| MIS | NRML | |
|---|---|---|
| Stands for | Margin Intraday Square-off | Normal |
| Holding period | Same day only | Overnight, up to expiry |
| End of day | Closed automatically before the market closes if still open | Stays open |
| Overnight gap risk | None | Yes |
When each fits
MIS suits trades built around a move within the session. Knowing the position must close today removes one decision and one risk: the market opening sharply against you tomorrow.
NRML suits a view that needs more than one session to play out. The cost is exposure to overnight events, and to a day's worth of time decay on the premium.
Overnight risk, in practice
Markets react to news that arrives while they are closed. The next session can open well above or below the previous close, and a stop-loss order cannot fill at a price the market never traded at.
- Size NRML positions smaller than intraday ones, because the realistic worst case is larger.
- Remember that an open NRML position still counts towards the next day's loss limits from the moment the market opens.
- Be especially careful holding into expiry day, when time value disappears fastest.
Cut-off times change