NRML Full Form

NRML Full Form

NRML full form is Normal Margin Order or Normal Order. These are special types of orders in the Indian stock market that let traders keep their shares in futures and options until the contract expires. Unlike day trading orders, you don’t have to sell off your NRML orders the same day you buy them.

Contents

NRML Meaning

NRML, which stands for “Normal Margin Orders”. NRML orders are for those who want to invest in futures and options and keep their investment for more than just one day. This is especially useful if you’re looking to benefit from long-term market trends.

Let’s understand this with an example: Mr. Sharma buys ome Infosys shares through an NRML order. This means he doesn’t have to sell them when the market closes. He can watch how the market is doing for days or even weeks and sell when he thinks it’s the best time.

How Does NRML Orders Work?

NRML orders allow traders to retain shares beyond a day, requiring adequate funds in their account. Unlike day trades, they don’t auto-sell, offering strategic flexibility in trading decisions.

  • Placing the Order: You use an NRML order when you want to keep your shares for more than one day. This is different from day trading, where you have to buy and sell on the same day.
  • Money Needed: To use an NRML order, you need enough money in your trading account to cover the cost of the shares you’re buying. This ensures you can afford to keep your shares for a longer time.
  • Keep them as Long as You Want: As long as you have enough money in your account, you can keep your NRML orders for a long time, even until they expire.
  • Your Call to Sell: NRML orders don’t automatically sell at the end of the day. You decide when to sell.
  • Strategic Flexibility: Because you can keep these orders for a while, you have more options for your trading strategy, whether that’s playing it safe or taking some risks.

MIS Vs NRML 

The main difference between MIS (Margin Intraday Square-off) and NRML (Normal Margin Orders) is that MIS Orders must be squared off on the same day, while NRML Orders can be held longer than a day. 

ParameterMIS (Margin Intraday Square-off)NRML (Normal Margin Orders)
Holding PeriodLimited to the same trading day (Intraday only).It can be held for an extended period, including overnight or even longer.
Margin RequirementRequires a lower margin specifically for intraday trading.Requires the full margin for the position, adhering to standard regulations.
Automatic Square-offAutomatically closes at the end of the trading day.Does not automatically close; requires manual intervention.
UsagePrimarily used for short-term trading strategies.Suitable for long-term trading strategies and holding positions.
ApplicabilityApplicable to equities, futures, and options for intraday trading.Mainly utilized for futures and options with a long-term view.
Strategic FlexibilityIdeal for tactical short-term plays within the trading day.Provides greater flexibility for complex strategies over a longer duration.
RiskLower because it’s just for a dayCould be higher because you’re keeping them longer
Interest ChargesNo interest charges are levied for holding intraday positions.Interest charges may be incurred if the position is held overnight.

How To Place An NRML Buy Order?

Here are the steps to place an NRML Buy Order:

  1. Log into your trading account of Alice Blue.
  2. Select the desired futures or options contract.
  3. Choose the NRML order type.
  4. Enter the number of contracts or lots.
  5. Set the price or use the market price.
  6. Confirm and place the order.

How To Convert MIS To NRML 

Converting an MIS to an NRML order allows a trader to extend the position beyond the trading day. Let’s have a look into the conversion process of MIS to NRML:

  • Find the open MIS order in your account.
  • Click on ‘Convert Order’ or a similar option.
  • Select ‘NRML’ from the options.
  • Confirm the conversion, ensuring adequate margins.

We hope that you are clear about the topic. But there is more to learn and explore when it comes to the stock market, commodity and hence we bring you the important topics and areas that you should know:

Trade settlement
Bonus issue vs stock split
Difference between bonus issue and right issue
Advantages and disadvantages of right issue

NRML Full Form – Quick Summary

  • NRML stands for Normal Margin Orders, allowing longer holding periods for futures and options.
  • Unlike intraday orders, NRML lets traders hold positions beyond the trading day.
  • Features of NRML include no automatic square-off, full margin requirement, and suitability for long-term strategies.
  • The main difference between MIS and NRML is the holding period. MIS only lets you hold for one day, while NRML lets you hold for longer.
  • NRML buy orders can be placed through the trading platform by selecting the NRML option.
  • Conversion from MIS to NRML is possible, allowing for extended position holding.
  • Alice Blue can help you invest completely free of cost. They also provide a Margin Trade Funding facility, where you can use 4x margin to buy stocks, i.e., you can buy stocks worth ₹ 10000 at just ₹ 2500. 

NRML Meaning- FAQs  

What is the NRML order?

Normal Margin Order, or NRML order, is a type of trading order that is mostly used in futures and options. Unlike intraday orders, NRML orders can be held overnight or longer.

What is the difference between NRML and MIS?

The main difference between NRML (Normal Margin Orders) and MIS (Margin Intraday Square-off) is that NRML orders let you keep your shares for an extended period until they expire. MIS orders are just for day trading and require you to sell the same day.

How to buy NRML?

  1. Choose the NRML order type in your trading platform.
  2. Select the desired asset for trading (e.g., futures, options).
  3. Specify the order details including price, quantity, and other parameters.
  4. Confirm and place the order.

Can I sell NRML on the next day?

Yes, NRML orders allow for holding positions overnight or even longer. Therefore, it is possible to sell an NRML position on the next trading day or any subsequent day.

What happens if I convert MIS to NRML?

Converting MIS to NRML changes the nature of the order from an intraday position to one that can be held for an extended period. It will require the trader to have the full margin required for the position, and the order will no longer be subject to automatic square-off at the end of the trading day.

What is NRML margin rate?

The NRML margin rate is the amount needed to keep a position open in the derivatives segment for the NRML product type. To trade overnight in derivatives, you need to keep the exchange-mandated margin. The NRML margin rate is different for each contract. It is based on the underlying asset, the size of the lot, and the date the contract ends.

How long can we hold NRML?

NRML orders can be held for an extended period, but only up to the point when the contract expires. So, while you don’t have to worry about selling them every day, you do have to sell them before the contract’s expiry date.

How do I exit NRML?

Exiting an NRML position involves placing a sell order for the same asset, quantity, and other matching parameters. It can be done manually through the trading platform whenever the market is open, allowing the trader to close the position and realize any gains or losses.

To understand the topic and get more information, please read the related stock market articles below.

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