Since intraday orders let you trade with more funds than you have in your account, a higher risk is associated with them. A stockbroker may have to restrict intraday orders for some stocks based on regulatory or risk management reasons. In this case, you will only be able to place delivery i.e., cash, NRML and MTF orders for such stocks.
Here are a few reasons intraday orders can be blocked:
- If the markets are volatile, specific intraday order types may be blocked to ensure that you don’t lose more money than what is available in your account. This also reduces the credit risk for the broker.
- Low liquidity or volume
- Small circuit limit range
- IPO listing day (since volatility is usually high)
- The stock has a high margin requirement and intraday trading may attract margin penalty.
- The stock is in a category where regulations don’t allow intraday trading (i.e., ASM, GSM, etc.)
Note: Intraday orders may be blocked for any stock subject to our RMS Policy.