One fine day I identified a stock that was lying in my demat account for a long time suddenly making a strong up move during last half an hour of the trading hours. I had a viewpoint that the stock will definitely open high the next day and thereafter it may fall and decided to sell it as soon as the market opens. But, I could not do it as I got stuck with an unforeseen situation the next day morning. Gone the opportunity! And the stock still lies safely in my demat account.
How could I have avoided this? The answer lies in the form of “After market order (AMO)”. After market order is a facility provided to traders and investors to place buy/sell orders after or before trading hours. We all know that BSE and NSE opens at 9.15 a.m and closes at 3.30 p.m. And it remains closed on Saturdays and Sundays. If I had been shrewd enough to place the order sometime in between the close and open time of the market the next day I would have been able to exit the loss making stock with a small profit.
How does an AMO work?
AMO orders placed when market is closed will be sent to the exchange next day morning before the market opens. All you need to do is to log in to ITS trading terminal or Tradeplus/ Infini Mobile app. Click on the menu “Order” and select the option “AMO” and place the order. Check here how to place AMO in ITS exe version and mobile app. The timings to place AMO orders for various segments are listed below.
All AMO received will be sent to the NSE/ BSE in equity cash market segment at 9 a.m when market pre-opens and at 9.15 a.m for equity derivatives. All AMO in commodity and currency segment is sent at 9 a.m. We send equity cash market AMOs at 9 a.m at pre-open session itself as the orders placed at pre-open session gets higher priority on execution than normal orders placed at the time of normal market opening.
However, trader/ investor should ensure sufficient cash balance in their trading account in case of placing a buy AMO and ensure the stock is available in their demat account in case of placing a sell AMO. Tradeplus does the risk management check only on the next day morning when it sends the AMO to the exchange at 9 a.m. And if any shortfall of funds or securities are found, the order gets rejected and it will not be sent to the exchange.
Benefits of AMO
- The flexibility of placing orders after market hours is useful for investors who cannot watch the market during trading hours. It helps them to analyse the news and market behaviour during the day and take an unbiased trading decision before placing the order. In other words it allows them time to think and place the order.
- AMO order can be modified or cancelled in case you sense any negative developments that has taken place over night.
- As it was in my case, placing AMO will be beneficial in case of unforeseen commitments that prop up.
- AMO can be placed in commodity and currency segment also.
- Can plan SIP in individual shares by using AMO facility.
Key features of AMO
- AMO can be placed either as “Limit order”or “Market order”
- Stop loss order and disclosed quantity orders are not allowed in AMO
- Limit orders should be placed at a price within the range specified by the exchange for the stock or at the closing price of the day.
- AMO can be modified or cancelled
- AMO is not allowed in case of bracket order and cover order
AMO is one more added facility to make investing and trading in stocks, ETF, currency and commodities hassle free helping investors and traders to enjoy relaxed investment environment. With AMO in place there is no way to shun investment with an excuse “no time to watch the market”.