When trading stocks on Zerodha or any other online brokerage platform, understanding the various terms and options available is essential to making informed decisions. One term that often confuses new traders is Disc Qty, short for Disclosed Quantity. This feature can play a strategic role in trading, especially for those who want to manage market perception or avoid revealing their full order size. By understanding what Disc Qty means and how to use it effectively, traders can gain better control over how their orders appear in the market.
Understanding Disclosed Quantity
Disclosed Quantity, or Disc Qty, is a feature that allows a trader to show only a portion of their total order to the market at a time. This is particularly useful when placing large orders. Instead of displaying the full quantity to the market, which could impact price movements, the trader can opt to disclose only a smaller, manageable portion. Once the disclosed portion is executed, another portion of the order is automatically revealed, continuing until the entire order is filled.
Example of How Disc Qty Works
Imagine you want to buy 1,000 shares of a stock. Rather than placing a single visible order of 1,000 shares, which might influence sellers to increase their prices, you set a Disc Qty of 200. The market will see an order for only 200 shares. Once those 200 are executed, another 200 shares from your total order will appear, and so on until all 1,000 shares are filled.
Benefits of Using Disclosed Quantity in Zerodha
Using Disc Qty can offer several advantages for retail and institutional investors alike:
- Market Impact Control: Avoid revealing your full order, which could shift prices unfavorably if the market sees large demand or supply.
- Execution Strategy: Break large orders into smaller, manageable lots for better execution over time.
- Anonymity: Maintain discretion in trades by showing smaller volumes.
Disc Qty in the Context of Zerodha’s Kite Platform
When placing an order on Zerodha’s Kite trading platform, you’ll notice an optional field for Disc Qty. This field allows you to enter a quantity lower than your total order. However, there are some rules to keep in mind while setting this value:
- The disclosed quantity must be at least 10% of the total order size.
- It must be in whole numbers no decimals are allowed.
- This option is only available for limit and market orders placed in the regular trading session (not applicable for AMO or aftermarket orders).
Steps to Set Disc Qty in Zerodha
To use this feature effectively, follow these steps:
- Log in to your Zerodha Kite account.
- Choose the stock or security you wish to trade.
- Click on Buy’ or Sell.’
- Enter the total quantity you wish to trade.
- In the Disc Qty field, enter the portion of the quantity to be displayed in the market.
- Place the order as usual.
When Should You Use Disclosed Quantity?
Not all trades require the use of Disc Qty. It is most beneficial in specific situations such as:
- High-Volume Trades: When placing large buy or sell orders that could influence market sentiment.
- Thinly Traded Stocks: When trading stocks with low liquidity to prevent large fluctuations due to your order.
- Strategic Entries: When you want to enter or exit a position quietly without alerting other market participants.
Limitations and Considerations
While Disc Qty offers tactical advantages, it also has some limitations:
- If the disclosed part of your order does not get executed, the rest of the order stays pending.
- Large orders with small disclosed quantities may take longer to fill entirely.
- Some traders may ignore smaller displayed orders, reducing the visibility of your actual trade intent.
Disc Qty vs Iceberg Orders
In more advanced platforms, there is a feature called Iceberg Order, which breaks large orders into multiple small ones automatically. While Zerodha offers a similar Iceberg Order feature now, Disc Qty remains a simpler, manual version of the same idea. The key difference lies in automation and granularity. Disc Qty requires manual input, whereas Iceberg automates the splitting process into batches with individual trigger conditions.
Is There a Cost to Using Disc Qty?
There are no additional charges for using the Disc Qty feature on Zerodha. Normal brokerage and exchange fees apply as per your trading plan. The option is there purely for strategic trading advantage and has no direct cost implications.
Best Practices When Using Disclosed Quantity
To make the most out of this feature, consider the following best practices:
- Set a realistic disclosed quantity neither too small to delay execution nor too large to alert the market.
- Monitor the market depth and volume trends before choosing your Disc Qty value.
- Use Disc Qty alongside limit orders to control both quantity and price visibility.
- Regularly evaluate order fill progress to adjust your strategy in real-time.
Disc Qty in Zerodha is a powerful yet often underused feature that allows traders to exercise more control over how their orders are displayed in the market. Whether you’re trying to prevent price impact, maintain a low profile while trading, or simply execute a large order efficiently, understanding how to properly use disclosed quantity can significantly enhance your trading strategy. While it’s not necessary for every order, in the right context, it can make a noticeable difference in your overall trading results. By learning the rules, benefits, and practical usage of this tool, you position yourself for smarter trading decisions in the Indian stock market.