A Cover Order is an advanced intraday two-legged order.To put it simply, a Cover Order (CO) is a combination of a market order and a stop-loss order. You can buy or sell a stock as a market/limit order and additionally have the ability to specify a ‘SL Trigger Price’ and ‘SL Price’ to reduce your exposure to market risks.
Order 1: This can either be a Limit or a Market Order. All you have to do is enter the Price you would like to purchase a particular stock. If you would like to place a market order, then keep the price as 0.
Order 2: This is the stop-loss leg where you need to define the SL Trigger Price and SL Price. You can also utilize a trailing stop loss. A trailing stop loss is basically a stop loss that keeps on changing depending on price movement. To illustrate, if you have bought HDFC stock at ₹1033 and the SL Trigger Price is set to ₹980, If the stock price rises to ₹1100 the SL Trigger Price will also rise by ₹53 to ₹1033. Therefore, a trailing stop loss always maintains the same price difference.
The same goes for Sell Cover Orders, however it is practiced inversely.