CNC Meaning in Share Market – The Most Important Order Type to Know!!!

CNC order is a trade option where investors buy stocks using their own funds and hold them for delivery. CNC stands for Cash and Carry, meaning shares purchased through CNC are settled in cash and stored in the investor’s Demat account for long-term investment purposes.

CNC Full Form In Share Market

The full form of CNC in the share market is Cash and Carry. It is a type of order where shares are bought without leverage, meaning the investor must have the full amount to purchase the stocks. The shares are delivered to the investor’s Demat account after the settlement.

CNC orders are primarily used for equity delivery trades, where the investor plans to hold the shares for a longer period. Unlike intraday trades, CNC doesn’t allow margin trading or short-selling. This makes it a safer option for investors who want to own stocks outright, avoiding the risks associated with borrowing funds for trades.

CNC In Stock Market Example

CNC in stock market means an investor buys shares to keep them. In this type of trade, the buyer pays the full price of the shares and holds them in a Demat account. It’s used when the investor wants long-term ownership.

For example, if an investor buys 50 shares of a company using a CNC order, they must pay the entire amount for the purchase. These shares will be credited to their Demat account after the transaction is settled. Unlike intraday trading, the shares in a CNC order are not sold on the same day, allowing the investor to hold them for as long as they wish. This method avoids the risks involved in margin trading.

Benefits Of CNC Order

The main benefit of a CNC order is that it allows investors to hold stocks for the long term without worrying about day-to-day market fluctuations.

• No Leverage or Borrowed Funds: CNC orders require the investor to use their own funds, eliminating the need for borrowed capital. This reduces the risks associated with margin trading, where borrowed money is used. Investors can fully own the shares without worrying about interest or loan repayments.
• Reduced Risk of Intraday Losses: With CNC orders, stocks are not sold within the same day, reducing the pressure of intraday price fluctuations. This is ideal for investors who are looking for long-term growth, as they are not forced to monitor short-term market volatility closely.
• Ownership of Shares: When you place a CNC order, the shares are credited to your Demat account after settlement has been completed. This ensures full ownership, allowing investors to benefit from dividends, bonuses, and other shareholder rights, which are not available in intraday trades.
• No Forced Selling: In CNC orders, there is no risk of forced selling at the end of the day, unlike in intraday trades. Investors can hold the shares for as long as they want, giving them the flexibility to sell when the market conditions are favorable.
• Lower Stress for Investors: CNC orders are suitable for investors who do not want the stress of monitoring their stocks daily. Since the shares are for long-term holding, investors can focus on their long-term goals without worrying about short-term market changes or price drops.

Difference Between CNC And MIS Orders

The main difference between CNC and MIS orders is that CNC (Cash and Carry) is used for delivery-based trades, meaning you buy and hold stocks in your Demat account. In contrast, MIS (Margin Intraday Square off) is used for intraday trades, where positions are squared off on the same day.

How To Place A CNC Order In The Share Market?

To place a CNC order in the share market, follow a few simple steps through Alice Blue, a popular stock broker platform.

• Login to Your Alice Blue Account: Start by logging into your Alice Blue trading account using your credentials. Make sure that you have sufficient funds in your account to make a purchase, as CNC orders require full payment for the number of stocks you want to buy.
• Search for the Stock You Want to Buy: Use the search bar on the platform to find the exact stock you wish to purchase. You can search by the stock’s name or ticker symbol, and in the results you will find the live market prices for the stock.
• Select CNC as the Order Type: Once you have selected the stock you want to buy, choose CNC (Cash and Carry) as the order type. This ensures that your order is placed for delivery, and the shares will be added to your Demat account after the transaction is completed.
• Set the Quantity and Price: Enter the total number of shares you want to buy in the quantity section. In this scenario, you can either place a market order (buying at the current market price) or a limit order (setting your preferred price for the purchase).
• Confirm and Place the Order: After filling in all the details, review the order summary to ensure everything is correct. Then, confirm and place your CNC order. Once the order is executed, the shares will be credited to your Demat account after the settlement period.

We hope that you are clear about the topic. But there is more to learn and explore when it comes to order types, and hence we bring you the other important order types that you should know:

CNC Meaning In Share Market – Quick Summary

• CNC refers to Cash and Carry, a trade where investors buy and hold stocks for long-term delivery in their Demat accounts.
• The full form of CNC in the share market is Cash and Carry, used for delivery-based trades without leverage.
• An example of CNC in stock market is when an investor buys shares to hold them in their Demat account without selling them the same day.
• CNC orders work by ensuring the investor uses their own funds to buy shares, holding them for long-term ownership.
• The main benefit of CNC orders is that they involve no leverage, offering lower risk, full ownership, no forced selling, and reduced stress from market fluctuations.
• The primary difference between CNC and MIS orders is that CNC is used for delivery trades, while MIS is for intraday trades with leverage, requiring positions to be closed the same day.
• To place a CNC order, log into Alice Blue, select the stock, choose CNC as the order type, set the quantity, and confirm the purchase.
• Start trading at no cost with Alice Blue.

What Is CNC In Trading? – FAQs