Nowadays, most of the trading transactions in the stock market happen through online platforms. Online trading is one of the fastest, secure, and versatile ways to invest and trade in the share market. The trader gets many options to use while placing their order to make their transaction more effective. However, using these features can be tough to understand and use. And in this blog also we are going to explore disclosed quantity or disclosed quantity in the share market. So, if you also feel confused while using the disclosed quantity feature in your trading app or platform, read this post as this will be extremely important for you.
Disclosed quantity is the term of the stock market available in the stock trading platforms like Upstox, Zerodha, and many more. This term is beneficial for the trader who trades with large quantities of the company’s stock. However, it is a simple feature but often confuses many traders, and most of them do not use it. So, to solve this confusion, let’s start understanding disclosed quantities in the share market.
What is Disclosed Quantity?
Disclosed quantity is the feature available in modern online trading platforms. It allows the user to show a portion of actual units or quantity of the exchange or purchase. And when the trader uses this option to buy or sell while submitting to the exchange. Then on the actual number of units displayed in the marketplace. While setting up disclosed quantity, traders should not enter the equal or above quantity of precise quantity, and it should also not go below the 10% of available units.
Let’s have a look at an example for a better understanding of this essential feature.
Example of Disclosed Quantity
Suppose you are a trader in BSE and want to buy 2,000 shares of TATA at the market price. And if you do not use disclosed quantity, then the number of desired shares you want to purchase will be shown in the open market, and you can do trading immediately with one deal. However, if you want to buy 20,000 shares of TATA, this approach would not be ideal to buy the shares. Therefore, you can use the Disclosed quantity and set it to 2000 shares. And whenever 2000 shares are executed or bought, the next 2000 shares’ quantity automatically will show in the marketplace until you buy 20,000 shares in total.
What Are The Rules of Disclosed Quantity?
Now you have learned what is the disclosed quantity, so let’s also understand the rules you need to consider while using this option while doing transactions.
Equity In NSE Or BSE: While trading with Equity, your disclosed quantity must not be below 10% of your total order or quantity.
F&O In NSE Or BSE: For F&O, there is no disclosed quantity option, and if you want to do so, you need to split the order and place the order in small quantities by hand.
CDS In NSE: In the case of CDS, the disclosed quantity should not go below 10% of the total order.
MCX (Goods Or Commodities): if you want to deal in MCX, you can have a minimum of 25% disclosed quantity of your total purchase or sell order.
Why Does A Trader Hide Their Order Size?
You may be thinking about why a trader should hide their order size, but it is one of the important features to use if the trader deals with large sizes. Let’s think if we need to buy a 5,00,000 share of Mahindra at Rs1000. And if we expose the full-size order, everybody will start showing their interest in the share of Mahindra. Also, when the demand for Mahindra’s share is higher, the shares’ prices go higher. Suppose due to high demand if the prices go Rs1500 then you will have to spend Rs500 more on each share. And this will cause you Rs25,00,00,000 loss. Therefore, it is not good to always expose the quantity size, and if you are going to buy a large number of shares, you should use the disclosed quantity as many other traders use.
How Can A Trader Use Disclosed Quantity?
If you want to use disclosed quantities, then you should first login to your trading account. Then, press on the buy or sell icon in the platform you are using, and once you press on this icon, a tab will appear. You can enter the actual quantity you want to buy or sell in quantity, but in the disclosed quantity, you can add the desired quantity. But it should not be below 10% of your total order and above or equal to the total number of order quantities.
Advantages of Disclosed Quantity?
There are some advantages of using disclosed quantity such as,
- By using disclosed quantity, you can reduce the volatility of the share or stock you are willing to buy or sell.
- It also helps in minimizing chances of speculation by many other operators who are there in the share market.
- You can use it to mask the total number quantity and effective execution of the order you decide.
Should A Trader Use The Disclosed Quantity Feature?
So, should you use the disclosed quantity feature? It is not required until you are planning to invest serious money, maybe in crores. However, if you are a mid-level or new trader, you might deal with small budgets. Therefore in these cases, it is a waste of time to use disclosed quantity features.
Disclosed quantity is designed for the high net worth individuals who trade in crores in the share market. Using this feature, they can mask up the order size and limit the losses in the share market. However, there are many other ways to mask the order quantity, making this trading process more accessible. But still, many serious traders use this option in their trading platform while dealing with such a large number of stocks. I hope you have learned what is disclosed quantity in the share market and many other essential terms.