Kart order, as the name suggests, refers to buying or selling a number of securities in just one order. This eliminates the effort to buy or sell them one by one.
Let us understand with an example. Suppose the government is concerned about the scarcity of fertilizer in the country and thus bans the export of the commodity. At the same time, it also announces a tax incentive for those companies that produce and sell most of their products in the domestic market so that they increase their production.
Such news can have a positive impact on the shares of companies that largely focus on the domestic market, while having a negative impact on those that cater to the foreign market. Now, you want to make money from this announcement by buying the first set of stocks while going short on the second set by trading them on an intraday basis.
You can do this easily by creating a basket and executing the order in one go. However, you will need to create a Kart for this.
To create a Kart , go to the Order tab from the top and select Kart . From the top right corner, select New Kart and add a name. Select Normal (we will look at the hedge basket later) before clicking on Create Kart .
Now you need to add the desired stocks to your Kart by searching from the bar below. Use the order window that pops up after you select stocks to fill in the desired quantity of shares, order type, order validity, etc.
Once you have added stocks to the Kart , you will find the margin required for all trades at the top. You can execute the order by clicking Execute Kart from the top right. If you want to edit something, hover your cursor on the stock’s name and a window will give you the option to modify or delete the selection.
The system will now send the order to exchanges.
Now, there are certain Kart that are used by traders who wish to reduce the margin required for the trade, apart from the above-mentioned benefit. These are called Hedge Kart . Follow the similar steps as above to create a new Hedge Kart . Just make sure you select Hedge instead of Normal. Choose MIS for margin intraday square off or Normal. Also, select the order type. Add securities that you want to trade to the Kart.