CNC vs MIS Order – Know the Difference to make Safer Order Types!

The main difference between CNC (Cash and Carry) and MIS (Margin Intraday Square Off) orders is that CNC is used for delivery-based trading, where stocks are held for longer periods, while MIS is used for intraday trading, where positions must be squared off within the same trading day.

What Is CNC in Share Market?

CNC (Cash and Carry) is a type of order used in the share market that enables investors to purchase stocks with the goal of holding them for an extended period. After the trade is completed, the shares are transferred to the investor’s Demat account.

CNC orders are mainly used for delivery-based trading, where the buyer is not required to square off the position on the same day. This type of order is suited for long-term investors who want to hold onto shares until they reach their desired profit levels or targets. Investors using CNC are not exposed to the volatility of intraday trading, which reduces the pressure of frequent monitoring. Additionally, CNC orders do not use leverage, meaning investors must fully fund the purchase.

What Is MIS Full Form?

The MIS (Margin Intraday Square Off) order is used for intraday trading, where positions are bought and sold within the same trading day. The full form of MIS reflects its purpose: allowing traders to use leverage and square off positions before the market closes.

MIS orders are popular among traders who want to benefit from short-term price movements within a single day. Traders use margin money provided by brokers to open larger positions than they would with just their available capital. However, all open positions must be closed before the market closes, or they will be squared off automatically by the broker.

Difference Between CNC And MIS Order

The main difference between CNC and MIS orders is that CNC is used for delivery-based trades, where shares are held for a long term, while MIS is used for intraday trades that must be squared off on the same trading day.

Benefits Of CNC And MIS Order

The main benefit of both CNC and MIS orders is that they cater to different trading styles. CNC is ideal for long-term investors, while MIS suits active traders looking to capitalize on short-term market movements.

Benefits of CNC order:

1. No Time Pressure: Investors can hold stocks for as long as they want, without needing to square off the position within a day. This flexibility allows for more strategic decision-making over time.
2. No Leverage Risk: Since CNC orders don’t use leverage, the risk of loss due to borrowed funds is avoided. Investors are only at risk for the amount they initially invest.
3. Stable Investment: CNC orders allow for delivery-based trading, which is more stable compared to intraday trading. This makes it a good choice for conservative investors seeking long-term growth.
4. Simple Process: It’s straightforward for those who want to buy and hold shares, without the pressure of daily monitoring. This reduces the need for frequent engagement with the market.
5. Less Market Volatility Exposure: CNC orders protect investors from the daily fluctuations in stock prices associated with intraday trading. This helps long-term investors avoid short-term price movements.

Benefits of MIS order:

1. Leverage Advantage: MIS allows traders to use margin, giving them the opportunity to trade larger positions than their available funds would permit. This maximizes potential returns within a single trading day.
2. Quick Profits: Traders can benefit from small price movements throughout the day, aiming for quick gains. This short-term strategy is ideal for active traders looking for immediate results.
3. Lower Capital Requirement: Since MIS provides leverage, traders can enter large positions with a smaller capital investment. This makes it easier to access higher-value trades with limited resources.
4. Flexibility in Trading: MIS orders are ideal for traders who prefer to trade frequently and capitalize on intraday volatility. This flexibility allows for adapting to market conditions throughout the day.
5. Automatic Square Off: MIS orders are automatically squared off by the broker if not closed manually, preventing overnight risks. This feature ensures traders avoid exposure to unexpected price movements after market hours.

How To Place CNC Order

To place a CNC (Cash and Carry) order in Alice Blue, you can follow these steps, ensuring the trade is for delivery and not intraday, allowing you to hold the stock long-term. Here are the steps to place a CNC order on Alice Blue:

• Log in to your account: Access your Alice Blue trading platform with your credentials.
• Search for the stock or F&O: Find the stock or futures & options (F&O) you wish to trade.
• Select Buy or Sell: Choose the action depending on whether you want to purchase or sell the stock.
• Select CNC for Cash and Carry: Make sure to choose CNC to indicate that it’s a delivery-based trade.
• Choose Market or Limit order: Decide whether to execute a market order (current price) or a limit order (specific price).
• Enter quantity and price (for limit orders): Input the number of shares and, if applicable, the price for limit orders.
• Enter stop-loss value: If desired, add a stop-loss value or trigger stop-loss tick size for risk management.
• Click Buy or Sell: Review your order details and click Buy or Sell to confirm the transaction.

How To Place MIS Order

Placing an MIS (Margin Intraday Square Off) order in Alice Blue allows traders to take advantage of intraday price movements. MIS orders are meant for same-day trades, which must be squared off before the market closes. Here are the steps to place an MIS order on Alice Blue:

1. Choose the stock or F&O: Select the stock or futures & options (F&O) you want to trade based on your intraday strategy.
2. Select Buy or Sell: Choose whether you want to initiate a buy or sell order for the stock or F&O.
3. Select MIS: Ensure that you select the MIS order type to confirm that the trade is for intraday purposes.
4. Choose Market or Limit order: Decide between a market order (current price) or a limit order (specific price).
5. Enter quantity and price (for limit orders): Input the number of shares and, for limit orders, specify the price you want to trade at.
6. Enter stop-loss value or trigger stop-loss tick size: Add a stop-loss value or trigger stop-loss tick size for risk management during intraday trades.
7. Enter the trigger price: If applicable, set the trigger price to execute the stop-loss or limit order once the stock reaches a certain level.

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

Difference Between CNC And MIS Orders – Quick Summary

• The difference between CNC and MIS orders is that with in CNC orders, investors can hold stocks for long-term delivery without needing to square off positions on the same day. MIS orders are designed for intraday trades, which must be closed before the market closes.
• CNC orders are suitable for long-term investors, offering less exposure to market volatility.
• MIS orders are for active traders who capitalize on intraday market movements and take advantage of small price changes.
• The key distinction between CNC and MIS is that CNC provides long-term flexibility, avoiding the need to square off within the day, while MIS gives traders the benefit of leverage for larger trades.
• To place CNC orders, select CNC under order type, confirm market or limit orders, and hold the stock after execution. 
• For MIS, select MIS order type, decide on market or limit orders, and square off positions before the day ends.
• Invest in the share market with Alice Blue for free.

What Is MIS Vs CNC Orders? – FAQs