So a lot of you are working professionals who have portfolios with investments in stocks and ETFs. One of the scariest things that can happen to your portfolio is that one of your stocks may start falling like a rock and you don’t even come to know about that several days later. I know this because I’ve met several professionals who were invested in stocks, such as yes bank, PC Jewellers Idea, etc.

They didn’t even know for several days that their stocks were down 10%, 20% and even 30% from the last time that day checked. To be honest, it’s not their fault because it’s not possible to track your investments every day and every second, because you are a working professional. So then the question comes, what is the solution?

Do we have a good solution for this problem? So, in this session, I will show you a very smart and automated way of avoiding these kinds of losses without having to keep checking the stock prices every day. So here is my portfolio. I have a bunch of stocks here and I’m sitting on some profits there, but let me just pick one of them.

Let’s say Jindal steel and power. Let’s take a look at its chart. So this is the chart of Jindal Steel and Power and as you can see, the stock has made a massive move on the upside and, I’m sitting on some handsome gains, almost 200% here, but at this point of time, I’m exposed to what is called as a positive risk.

There are two types of risk, positive risk and negative risk. Positive risk is when you are sitting on profits and you want to protect your profits and negative risk is when you are sitting on losses and you want to avoid taking excessive losses. So in my case, what I have is a positive risk, but the risk is a risk.

I have to manage the risk. So what do I do? I’m a working professional. Let’s say, for example, I don’t have time to keep tracking the Jindal Steel and Power. So what I can do is I can look at my chart and I can say that you know what, I’m sitting on good profits. If Jindal Steel and Power starts to come below 200 rupees, I want to get out and on the upside, I can also say that if Jindal Steel and Power continues this rally, and it goes up to 250, I would like to book some partial profits. So how will I do that?

So for that, what I will have to do here is I have to select ‘create GTT or GTC’. It is good till the triggered order is in Zerodha. When I click on this, you will see a little screen here and, automatically you will see that the quantity is populated, i.e. the quantity that I have bought in my holdings. So here I have two types of orders. One is called a stop-loss order and the other is the Target order.

In this case, if Jindal Steel and Power comes down to, let’s say 201 rupees, or I can even give in terms of percentage, let’s say 15% from here. So 15% we’ll bring it down to 193, or if I want to give an absolute number, I can say 200 hundred prices. So let me go with the absolute number here.

So if Jindal Steel and Power comes down to 200 hundred rupees, I don’t want to stick around in the stock. But the nature of this stock, when it starts falling, it can fall too much and I can lose most of the profits that I’ve already made here. So if Jindal Steel and Power comes down to 201 rupees, I want to sell, half of what I have, let’s say 150.

I’m going to specify that price here. So let’s take the price of 200. If there is a scenario where Jindal Steel and Power starts to fall from the current levels and the current price is 227. From 227 rupees, if it comes down to 201 rupees any day which can happen tomorrow, 6 or 9 months from now, that will get triggered. What it will do is it will place the order of 150 quantity at 200 prices. So from 201 rupees, if it comes down a little bit more and it comes down to 200 rupees, this order will get executed and I will be out of my investment.

So this is the way by which I am minimizing the positive risks that I have currently in my portfolio for Jindal Steel and Power. On the other hand, I also want to have an upside target. For example, let’s say at 200 rupees, the stock continues to 250 rupees. Let’s say, 20% from here and you can pick anything here. Then I can specify that this is my downside risk, but this is my upside target.

If Jindal Steel and Power starts to go higher, let’s say 272. Let’s take 2 scenarios. One is 250 rupees. Then I want to sell, 150 shares at 250 rupees, or I can say 249. Typically what I would recommend is that for an audit on the upside, you have to give a price a little higher.

For the order on the lower side, the prices have to be a little lower. So in this case, 200 is less than 200.9 and in this case, 251 is higher than 250. It’s just so that after the trigger, you have a few seconds for the order to get placed. It is sort of a buffer and the beauty of this order is that you have one cancels the other. So for example, if the stock goes up to 250, my order will get executed on the upside, I will book my profit and this guy will automatically get cancelled. So I don’t have to go back and worry about, this pending order and if the stock comes down and we get triggered so that confusion is avoided. So this is a typical way in which you can place an order. If you don’t have this kind of reference, let’s say an upside. You can even place a single order in which you can say that if the stock goes down to let’s say 200, then you place an order where you are exiting 150 quantities at this price.

Either way, it’s perfectly fine. You decide what you want to do. So in this particular case, let’s say, I want to do this. I want to place an order like this, where I have both the stop-loss and the target. So having said all that, I’m going to place this order right now. So you get this message that the GTT has been created.

Now, for checking the order, you have to come back here and you will see here that in the open orders, you will not see anything. This is the good old stop-loss order for the intraday purpose, but that’s not the GTT order that we just placed. For that, you have to go to the GTT tab and you can see here that this order is here.

You can see there are two triggers. One is at 250 and the other is at 201, and the latest traded price and you can see the status is active. If you want to modify this, you can always modify this. You will get to the same screen. It’s very easy and if you want to cancel it for some reason, you can always delete it and this will be gone.

Now, there are a few things that we have to keep in mind when we create GTT orders. The number one thing is that the validity of this order is for one year. So if it’s not triggered within one year, that GTT order will automatically get cancelled and hence this is not something that is going to be there for perpetuity.

There is a time limit to that and after one year, you have to come back and you have to create a fresh set of orders. The other thing that you have to remember is the GTT orders is valid only once. So if the order gets triggered by a GTT and it, for some reason, let’s say, did not get filled.

The price that you specified was so odd that you didn’t find any buyers at that and the order will not be filled, but at the same time, the GTT order will be expired. So there is one this corner case that you have to remember that it’s not necessarily that just because your order got triggered, That it will get executed. So there’s a difference between that, it is a corner case, but it can happen. So that’s one of the reasons why I recommend that whatever prices that you specify here, make them good round numbers. Don’t make them 201.65 or 251.25, because at the time it gets triggered, you want your order to get filled.

You don’t want to be in a situation that the order is not filled because nobody has placed an order at this specific price. So keep whole numbers, and you will be fine. There are some other things that you have to learn about GTT orders that you can go and check out in the link below.

But primarily guys, if you understood this GTT concept, how you can use these orders, you can very effectively use them to protect your portfolio from incurring some severe losses. Now, let me show the same thing to the mobile app, for those of you who are savvy and who only used the kite app. Uh, so you can go to your portfolio.

And here we took the example of Jindal Steel and Power, but let’s say for Indiabulls housing finance, I want to do the same. So, what I have to do is that instead of clicking or add or exit, I have to click on this create GTT and the same screen appears here. I just have to pick the trigger price for the stop-loss order and the target order, I have to pick the trigger price here, quantity, price, quantity pricing. And after you’re done that, all you have to do is just create GTT and you are done. So the GTT order has been placed. You can check that out in the order section and you have to go to the GTT tab.

Here you can see that for Indiabulls housing finance, I have an active GTT order. So guys, what I’ve covered in this video is the mechanics of how you can exit without having to worry about day checking the stock prices of your investment daily. But that doesn’t answer at what condition you should exit. For a long-term investor, it is very important to stay in a good quality stock for as long as possible and not get shaken out by these short term fluctuations. So the criteria for exit cannot always be as blunt as, if the price goes below this, you know, I have to exit, so you have to do a little bit more analysis and then come to a conclusion at what price would you like to exit. So what I will do is, you know, in future videos, I will make a video about how I decide when I exit an investment. Maybe that can shed some light on how you can plan your exit strategy. Personally speaking, I don’t use GTT that much because there are more sophisticated ways via algo trading, which I’m, by the way, a huge fan of. So I use algorithm trading because then I can create multiple conditions-based, on my criteria for any individual stock. But for an average investor, who’s not very savvy in terms of technology or who is not very savvy in terms of trading, the GTT orders are a blessing. So I hope that you will take advantage of GTT orders and prevent a huge fall in your portfolio and get out of those bad stocks as soon as possible.