AMO Order Explained: What It Is, Charges, Timing & How to Place an AMO Order in Zerodha

Introduction

In the world of stock market trading, AMO orders (After Market Orders) are an important tool for traders who want to place orders outside regular market hours. These orders help traders take advantage of price fluctuations after market hours and ensure they don’t miss out on trading opportunities.

If you’ve been hearing terms like AMO order charges, AMO order validity, and how to place AMO orders in Zerodha, this article will provide you with everything you need to know. We’ll cover how AMO orders work, their execution timing, and common misconceptions associated with them.

What Is an AMO Order in Stock Market?

An AMO order refers to an After Market Order placed after regular stock market trading hours. In Indian stock exchanges like NSE (National Stock Exchange) and BSE (Bombay Stock Exchange), the market opens at 9:15 AM and closes at 3:30 PM. However, traders often wish to place orders outside of these hours.

An AMO order is a mechanism that allows you to place an order after the market has closed, which will be executed when the market opens the next day.

Key Characteristics of AMO Orders:

• Order Placement: AMO orders are placed after regular market hours (typically after 3:30 PM).

• Execution: These orders are executed during the market opening hours the next day.

• Types of Orders: AMO orders can be for buying or selling securities.

How AMO Orders Work

When you place an AMO order:

• Order Placement: The trader places the order after market hours (before 3:30 PM).

• Order Holding: The order is stored in the exchange’s system, awaiting the next market session.

• Execution: The AMO is executed automatically when the market opens the next day, provided the market conditions meet the order parameters (price, quantity, etc.).

AMO orders give traders the flexibility to plan and execute their trades even when they are unavailable during the market’s regular trading hours.

When Does AMO Order Get Executed?

AMO orders are executed when the stock market opens the next day. The execution of these orders depends on the market opening prices and the availability of stocks.

Here’s a timeline for better understanding:

• Order Placement: After 3:30 PM, up until 11:59 PM.

• Order Holding: The order remains in the system overnight.

• Order Execution: The order is executed at the market opening at 9:15 AM.

If the order is a limit order, it will only be executed when the stock reaches the specified price. If it’s a market order, it will be executed at the best available price when the market opens.

AMO Order Charges

Many traders wonder if there are AMO order charges that apply when placing orders after hours. The charges for AMO orders generally depend on the broker and the type of order (market or limit). Here are the common charges associated with AMO orders:

• Brokerage Fees: Same as regular orders. Most brokers charge a fixed percentage of the total trade value or a flat fee per trade.

• Transaction Charges: The usual exchange transaction charges apply.

• No Extra Charges: There are generally no additional charges for placing an AMO, as long as the order adheres to the exchange’s rules.

For detailed information about AMO order charges for specific brokers, such as Zerodha or ICICI, you should check the broker’s fee structure.

AMO Order Validity

AMO orders typically have a validity of one day, meaning they are executed the next business day when the market opens. However, if the order is not executed on the day the market opens, the order will be cancelled automatically.

Some brokers also allow traders to place GTC (Good Till Cancelled) AMO orders, which remain valid until the order is executed or cancelled manually by the trader. Always ensure that you understand the validity of the AMO orders being placed with your broker.

AMO vs Pre-Market Order: Which Is Better?

AMO Orders

• Time: Placed after market hours and executed the next day.

• Execution: Order execution happens at the market opening.

• Availability: Suitable for traders who are unable to trade during regular hours.

Pre-Market Orders

• Time: Placed before the market opens, typically from 9:00 AM to 9:15 AM.

• Execution: Pre-market orders are executed within the pre-market session.

• Availability: Pre-market orders provide a limited window for traders who want to trade in the early hours.

Which Is Better?

AMO orders are better for traders who want to place orders outside of regular trading hours without worrying about specific time limits (beyond the market close).

Pre-market orders are suitable for traders who wish to execute trades in the early hours but before the market opens.

How to Place an AMO Order in Zerodha

Placing an AMO order in Zerodha is simple and can be done through the Zerodha Kite platform:

• Login to your Zerodha Kite account.

• Go to the “Orders” section and select the stock you want to buy or sell.

• Choose the type of order (limit or market order).

• Select AMO from the order placement options.

• Confirm the order after reviewing all details.

• Submit the order for execution the next day.

Once the market opens, your order will be executed automatically.

NSE AMO Order Timing

The NSE AMO order timing is as follows:

• Order Placement: AMO orders can be placed anytime after the market closes at 3:30 PM and up to 11:59 PM of the same day.

• Execution: These orders are executed the following trading day when the market opens at 9:15 AM.

This extended time window allows traders to plan their trades for the next market session.

Can AMO Orders Be Cancelled?

Yes, AMO orders can be cancelled if they are still pending execution. You can cancel your AMO order before the market opens (before 9:15 AM), but once the market is open, the order will be executed automatically.

Most brokers, including Zerodha, allow users to modify or cancel their AMO orders through their online platforms. However, once the order is executed, it cannot be undone or reversed.

Common Misconceptions About AMO Orders

Some common misconceptions about AMO orders include:

• “AMO orders can only be for large trades”: AMO orders can be used for both small and large trades.

• “AMO orders always get executed at the requested price”: AMO orders are subject to market conditions, and execution depends on the availability of stocks at the specified price.

• “AMO orders have lower priority than regular market orders”: While AMO orders are executed at the market open, they are treated similarly to other orders in terms of execution priority.

Conclusion

AMO orders are a valuable tool for traders who want to place orders outside regular trading hours. Whether you are trading stocks, derivatives, or mutual funds, understanding the AMO order process, its charges, and execution timings can help you make better trading decisions.

By understanding the nuances of AMO orders, such as AMO vs pre-market orders, how to place AMO orders in Zerodha, and the impact of AMO order timing, traders can benefit from greater flexibility and more control over their trades.

Disclaimer

This article is intended solely for educational and informational purposes. It does not constitute trading, financial, or investment advice. BondScanner does not provide personalized advisory services through this content.

Readers are encouraged to consult with their trading platform or financial advisor before placing any trades.