Market Price Protection (MPP) on Angel One: Safeguarding Your Orders

In fast-moving markets, prices can change within seconds. While placing a market order ensures quick execution, it may sometimes result in trades getting executed at prices that are significantly different from what you expected, especially in volatile or low-liquidity conditions.

To help reduce this risk, Angel One offers Market Price Protection (MPP) a built-in safeguard designed to prevent extreme price execution, which aligns with exchange circulars and Angel One's internal risk policies.

Key Takeaways

• Market orders on Angel One are executed within a protection range
• Protection levels vary by asset class and market conditions
• Indicative ranges go from up to ~0.5% for cash stocks to up to ~40% for low-premium stock options
• Provisional margin is temporarily blocked and released after execution or cancellation
• Orders may remain unexecuted if prices move outside the allowed range

Why is My Market Order Protected?

Market Price Protection ensures that your market order is executed within a predefined price range by converting it into a limit order when required. The objective is to reduce the risk of execution at extreme prices, especially in volatile or illiquid market conditions.

If the market price moves beyond this protection range, your order is automatically converted into a limit order within the allowed range.

What Does “Your Market Order is Protected” Mean?

When you see the message “Your market order is protected” on the order window, it means your order will execute within a defined price band around the current market price.

For example:

• Cash stocks (NSE or BSE): Protection is typically up to 0.5% of the Last Traded Price (LTP)
• Futures and options (F&O): Protection varies based on contract type and option premium range

Why is MPP Important?

MPP is particularly useful in situations where:

• Markets are highly volatile
• There is low liquidity in a stock or contract
• Bid-ask spreads are wide
• Sudden price spikes or gaps occur

In such cases, a regular market order may execute at an unfavorable price. MPP helps reduce the likelihood of such extreme executions

Example Scenarios

1. Cash Stock Example

Stock: RELIANCE 
LTP: ₹2,400 
Order: Buy market order for 100 shares

Protection: MPP applies a protection band of up to 0.5%. The system converts your market order into a limit order with a maximum price of ₹2,412. The order executes at the best available price within this range.

2. Index Options (OPTIDX)

Contract: BANKNIFTY 25-Dec-24 51500 CE 
Premium: ₹9 
Order: Buy market order for 15 lots

Protection: Since the premium is below ₹10, MPP can apply a buffer of up to 20%. The order will execute only if the price is within approximately ₹10.80.

3. Stock Futures (FUTSTK)

Stock: TATASTEEL 
LTP: ₹130 
Order: Sell market order for 10 lots

Protection: MPP applies a protection band of up to 1% for stock futures. This converts your order into a limit order around ₹128.70, ensuring execution within the allowed range.

How Is MPP Calculated?

MPP is determined based on exchange guidelines, segment, and instrument characteristics. The protection acts as an upper bound and may vary depending on market conditions and liquidity.

MPP vs Regular Market Orders

What About Provisional Margin?

When placing an order, you may notice “Provisional Margin” in the Margin Required section. This is an additional amount temporarily blocked to account for the protection range applied under MPP.

Why Is Provisional Margin Necessary?

1. Supporting the protection range: Since MPP may set a higher limit price for execution, the system temporarily blocks extra funds to cover that range.
2. Temporary in nature: Once the order is executed or cancelled, any unused portion of this margin is released immediately.

Example

Instrument: RELIANCE 
LTP: ₹2,400

Order Value: ₹2,40,000 (100 shares) 
Provisional Margin: ~₹1,200 (up to ~0.5%)

Total Blocked: ₹2,41,200

If the order executes within ₹2,412, any unused margin is released back to your account.

What Happens if the Market Moves Beyond the Protected Price?

If prices move outside the allowed range, the order may remain partially executed or unexecuted. It will continue to stay in the system as a limit order until prices return within the acceptable range.

This helps avoid execution at extreme prices, particularly in illiquid conditions.

Where Can I See the Protection in Action?

Orderpad

While placing an order, you will see a message under the Market option stating “Your market order is protected.” This indicates that MPP is active.

Order Details Screen

After execution, you will see details such as the executed price along with a note like “protected up to ₹16.95,” providing visibility into how the protection was applied.

Why is This Important for Traders?

Market orders offer speed, but they can expose traders to price slippage in volatile or low liquidity situations.

With MPP, you get:

• Better price control within a defined range
• Reduced slippage risk
• Improved transparency on order execution

Exclusions from Market Price Protection (MPP)

MPP is not applicable to post-market session orders.

Conclusion

Market Price Protection helps reduce the risk of execution at unfavourable prices while placing market orders.

It allows you to participate in the market with added control, especially during volatile or low liquidity conditions. Understanding how this works can help you make more informed trading decisions.
 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks. Read all related documents carefully before investing.