What is AMO (After Market Order) in zerodha

What is after market order or AMO order

Do you want to maximize your trading potential with Zerodha? Understanding AMO (After Market Order) is a key step towards achieving that goal. In this article, we'll dive into the intricacies of AMO and how it can benefit your trading strategy. With AMO, you have the power to place orders outside regular market hours. This means you can take advantage of market-moving news or events that occur after the market has closed. Whether you're a busy professional or simply prefer to trade at your own pace, AMO gives you flexibility and convenience. But how does AMO work? We'll explain the process of placing an AMO order and how it differs from regular market orders. You'll learn about the limitations and risks associated with AMO, as well as the best practices to ensure your orders are executed effectively. Stay tuned for expert tips and insights that will help you make the most of AMO in Zerodha. Gain a competitive edge in the market and unlock new trading opportunities with this powerful tool. Let's unravel the world of AMO together.

After market orders (AMOs) allow traders and investors to place buy or sell orders for stocks after regular market trading hours. It is an advanced order which helps traders or investors to place buy or sell orders after regular market hour. All other things related to order placing is same. The only difference is you are placing it after regular market hour. Zerodha sends these AMO orders to exchange, next day on market opening. This facility is very helpful for those who can't track market in regular market hours between 9.15 AM to 3.30 PM. 

How does AMO order work? 

AMO (After Market Order) or after-hours order facility allows Indian retail investors to place buy or sell orders for stocks after the regular market trading hours. This feature offered by some brokers like Zerodha, Upstox aims to provide more flexibility to traders for placing orders. AMO allows traders to place orders between 15 minutes after market close and some defined cut-off time set by the broker. These orders wait in queue and get executed when the market opens next day at prevailing market prices.

Some key things Indian traders must know about AMO facility - orders cannot be modified or cancelled after cut-off time; not all stocks are available for AMO, check with your broker; AMO price range limit cannot exceed +/- 1% of closing price on order day; ensure you have enough margin to avoid shortfall & order rejection. The limit can change upto 5% based on brokers. While AMO offers convenience of out of hours order placement, execution price uncertainty remains which traders should factor. Checking stock-specific AMO lot size and price limits before order placement is advisable. Usage of smart order routing algorithms by brokers can optimize order execution for AMO orders during market opening.

Overall, AMO offers Indian investors greater flexibility but does not guarantee specific price, so caution is necessary. Checking broker AMO policy details and doing risk management is key while using this facility.

Key Features of AMO or After Market Orders:

• Orders can be scheduled from Monday to Friday in off market hours. 
• All order parameters like stock selection, order type, quantity, price etc. remain the same as regular trading hours 
• Orders sent to exchange platform next day at market open by broker 
• Useful for investors/traders unable to access market 9:15AM - 3:30PM

How to place an AMO order in Zerodha - step by step guide

The procedure to buy or sell a stock using AMO order is similar to steps involved in normal order. In zerodha kite, you need to click buy or sell button first. Then click more to see AMO order option. In the above screen shot of zerodha order book, you can see AMO order option. You can use that to place an after market order or AMO order in zerodha.

I have shown th screenshot of zerodha kite in this example. But procedure is same in all brokers like alice blue, fyers etc.

AMO order in zerodha timing

For equity segment, you can place AMO order anytime between 3.45 PM to 8.57 AM for NSE and  3.45 PM to 8.59 AM for BSE. For F&O segment, you can place order till 9.10 AM. For currency segment AMO order timing in zerodha is between 3.45 PM to 8.59 AM. This timing is based on the data available while writing the article and it can change. You can check it with your broker to know latest timing 

You are allowed to place after market order or AMO between these times only. AMO order placed in market hours will be rejected.

In commodity segment, you can place AMO order in commodity segment anytime during the day. But order will be sent to exchange at 9 AM (commodity market MCX opening time). So all order placed before 9 AM will be sent to exchange on same day on market opening. AMO orders placed after 9 AM will be sent to exchange next day.

Now we will discuss some other order types a trader should know about - pre market order and post market order. It will help you understand the difference between these order and after market order (AMO).

Advantages of AMO orders

The AMO or After Market Order facility offers some useful benefits that Indian share traders can utilize to their advantage. The key advantage is the flexibility it provides to place orders outside regular market hours. So if a trader missed placing order during the day due to some reason, AMO allows the trader to still put the order after close with price locks.

Another advantage is that AMO acts as a queuing mechanism for orders. So if you want to buy a stock first thing in the morning, you can place the AMO order at night which sits in queue and gets executed right after market open. This increases the chances of order execution at desired price levels compared to placing order next morning. Traders also save time as they don't have to wait next day for market to open to punch order.

AMO can also be strategically used to target specific entry prices for stocks by placing these orders with price limits. For instance, if you want to buy ABC stock around ₹550 which is 1% lower than closing price, you can use AMO to place an automatic order for this price range. If price corrects next day, your order will get filled automatically without manually intervening.

Thus, AMO empowers Indian traders by providing convenience of out of hours order placement coupled with next day auto-execution. Features like queuing priority and price range limits add more strategic dimensions for traders. Prudent use of AMO can improve trade execution efficiency.

Limitations of AMO orders

AMO or After Market Order is no doubt an useful facility offered by Indian brokers, but it comes with some limitations that traders should consider.

First limitation of AMO orders is that you cannot modify or cancel them once the order cut-off time is passed. Suppose you suddenly realize that you made a mistake but the AMO order is already placed and in-queue, you have no option to cancel or edit it. The order will execute next day at market price but you are committed to buying at that price even if it may not suit you.

Another AMO limitation in Indian trading context is that you cannot place these order for all stocks. Low liquid or illiquid securities may not be available for after market order placement. Traders must check with their broker or on order page which specific stocks offer AMO facility. 

The most critical AMO limitation remains execution price uncertainty since you cannot predict market movement. So traders who put market order should adopt prudent risk management. While AMO offers convenience of order placement timing, unpredictability of final execution price is a risk Indian traders should acknowledge while using this facility. Checking all broker-specific AMO order restrictions is highly recommended.

Check this video to know more about order types in Malayalam - https://www.youtube.com/watch?v=crU7L6Yvhx8

What is Pre market order

Morning 9 AM to 9.15 AM is known as pre market session. You can place pre market orders in the first 8 minutes of this premarket session. You can place both market and regular order in pre market session. Between 9.08 AM to 9.15 AM these orders are matched and trades are confirmed.

Pre market order is only available for equity segment. 

What is Post market order

Post market session is open between 3.40 PM to 4.00 PM.  You can place equity delivery buy and sell calls in this session. All orders will be executed at closing price only. Its a less active session. You can place orders only in equity segment and only CNC delivery orders.

Check our previous posts What is CNC in zerodha And what is MIS in zerodha to know more about other zerodha orders.

Frequently asked questions

What are AMO orders in India? How do they work? 

AMO (After Market Order) facility allows Indian retail investors to place buy or sell orders for stocks after regular market hours. These orders get queued and execute next day when market opens at prevailing prices. Traders can place AMO orders between 15 minutes post closing till cut-off time set by the broker. 

Can I buy stocks after market hours in India?

 

Yes, Indian brokers like Zerodha, Upstox offer after market order (AMO) facility using which retail investors can buy or sell stocks after market hours. These AMO orders are placed post closing between specified time periods and remain queued for automatic execution next day after market opens. 

AMO vs GTT orders in India: Which one to choose? 

AMO orders allow order placement after market hours at defined price levels but don't allow modification. GTT (Good Till Time/Triggered) orders can be modified and triggered as per pre-set conditions. For closing positions after hours with no flexibility, AMOs are good. For more control post order placement, GTT may be preferred. Choice depends on specific trade requirement.