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Understand what CNC, MIS, and NRML mean in stock trading, how these order types work, and when traders use them for different strategies.
In the world of online stock trading, selecting the right order type is crucial for aligning your strategy with your financial goals. CNC, MIS, and NRML are three common order types offered by brokers in India, each designed for a specific style of trading—from long-term investing to intraday speculation and derivatives. Understanding how they work can help traders and investors make more informed decisions and avoid costly mistakes.
CNC (Cash and Carry) is a delivery-based order type used for purchasing stocks with the intention of holding them beyond a single trading day.
When you place a CNC order, you're buying shares by paying the full price upfront—without leverage. These shares are credited to your demat account and can be held for as long as you want. CNC is commonly used for delivery-based investing and holding shares beyond a single trading day.
It does not allow auto square-off or margin trading, and shares cannot be sold on the same day using the CNC option unless you already hold them in your demat.
MIS is a popular order type for intraday traders looking to take advantage of leverage to magnify their returns (and risks).
When you use the MIS order type, your broker allows you to buy or sell shares using margin—essentially borrowing funds to trade larger positions. This facility is often used for short-term strategies, including cash carry arbitrage, where positions are taken to benefit from price differences within the same trading day. However, all MIS trades must be squared off (closed) within the same trading day, typically by 3:15 PM. If you don’t do it manually, the broker will square it off automatically.
MIS is generally used for intraday trading with margin, requiring active monitoring since positions must be squared off the same day.
NRML is primarily used in futures and options (F&O) trading and allows traders to carry forward their positions without the obligation of same-day square-off.
Unlike MIS, NRML doesn't offer intraday leverage for equities. However, in F&O, it allows traders to maintain their position for multiple days by paying the required margin upfront. NRML is primarily applied in F&O trading for carrying positions beyond a single session, based on margin requirements.
NRML trades are not auto-squared-off and give more flexibility to derivative traders in terms of strategy and time horizon.
Understanding the difference between CNC and MIS can help you pick the right order type based on your trading intent:
| Factor | CNC (Cash & Carry) | MIS (Margin Intraday Square-off) |
|---|---|---|
Purpose |
Long-term investment |
Short-term intraday trading |
Leverage |
No |
Yes (margin provided by broker) |
Holding Period |
Unlimited (delivery-based) |
Same-day only |
Auto Square-off |
No |
Yes (end of day by broker) |
Suitable For |
Investors |
Active traders |
Though both MIS and NRML offer margin trading, they serve entirely different timeframes and trading products:
| Factor | MIS (Margin Intraday) | NRML (Normal Margin) |
|---|---|---|
Purpose |
Intraday profit-taking |
F&O positional trading |
Leverage |
Yes |
Depends on margin requirements |
Holding Period |
Same-day only |
Multiple days (as per expiry) |
Auto Square-off |
Yes |
No |
Suitable For |
Day traders |
F&O traders with multi-day strategies |
Traders often begin with MIS to understand market behavior and later move to NRML for deeper strategies in F&O.
The choice of order type generally varies depending on holding period, market product, and margin requirements:
CNC (Cash and Carry): Commonly associated with delivery-based investing, where shares are purchased in full and held beyond a single trading day.
MIS (Margin Intraday Square-Off): Typically linked to intraday trading, where positions are taken using margin but must be closed within the same trading session.
NRML (Normal Margin): Primarily applied in derivatives (F&O) trading, allowing positions to be carried forward beyond one day by maintaining the required margin.
Each order type has different rules for margin, holding period, and square-off, which are determined by the broker and exchange framework.
CNC, MIS, and NRML are fundamental to executing trades efficiently in the Indian stock market. While CNC focuses on delivery-based investing, MIS caters to intraday traders using margin, and NRML serves F&O positions held over multiple days. Understanding the purpose, leverage, and square-off rules of each order type helps ensure compliance and proper execution.
This content is for informational purposes only and the same should not be construed as investment advice. Bajaj Finserv Direct Limited shall not be liable or responsible for any investment decision that you may take based on this content.
Yes, you can square off CNC orders the same day, but it won't be considered intraday unless you already held the shares in your demat account.
The broker will auto square-off the MIS position towards the end of the trading session, typically around 3:15 PM.
In MIS, brokers allow you to trade larger positions with a smaller capital by providing margin, which enhances both profit and risk potential.
Yes, NRML typically requires the full exchange-prescribed margin, especially in F&O trading, since the position is carried overnight.
If you don’t maintain the required margin, the broker may square off your NRML position or issue a margin call.
Buying in Cash and carry and selling in MIS is possible because CNC represents delivery-based holdings, while MIS is an intraday product type, and selling CNC holdings as an MIS order simply treats the sale as an intraday trade for that session.
MIS is a product code used for intraday trading where positions are squared off within the same trading day, while CNC is used for delivery-based trades where securities are held in the demat account without intraday square-off requirements.
Shares marked under CNC can be sold because they represent delivery holdings in the demat account, and the sale reflects a reduction of the quantity held once the transaction is completed.
The full form of NRML is Normal Order, which is a product type used for carrying forward positions in segments that allow overnight or multi-day holding without mandatory intraday square-off.
NRML positions can be held for as long as the exchange segment permits and as long as margin requirements are maintained, allowing positions to remain open beyond the intraday session.
NRML positions can be sold on the same day because they function as regular carry-forward orders, and traders may choose to close them within the same session or retain them for longer periods depending on margin availability.
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