Short answer

This nudge is displayed when you place a limit order above the LTP for buy orders and below the LTP for sell orders. In these cases, the exchange executes the limit order as a market order, which is also called a market protection order. This is because a limit order allows you to buy or sell an instrument at a specific price or a better price.

Example scenario

The LTP of Axis Bank is ₹965.55. The best bid and offer are at ₹965.50 and ₹966.00, respectively.

Buy limit order

If you still want to buy the stock at ₹970, you can use stop-loss (SL) or Good Till Triggered (GTT) orders.

Buy limit orders are executed at the limit price or lower than the limit price. If the limit price for a buy order is higher than the LTP, your order will be executed as a market order since the LTP is lower than the limit price.

You place a buy limit order at ₹970 when the LTP of Axis Bank is ₹965.55. Your order is executed at the market price since there is an offer to sell at ₹966, which is lower than the limit price of ₹970.

You receive the stock for ₹966 instead of ₹970 (₹4 less than what you were willing to pay).

Sell limit order

Sell limit orders are executed at the limit price or higher than the limit price. If the limit price for a sell order is lower than the LTP, your order will be executed as a market order since the LTP is higher than the limit price.

You place a sell limit order at ₹960 when the LTP of Axis Bank is ₹965.55. Your order is executed at the market price since there is an offer to buy at ₹965.50, which is higher than the limit price of ₹960.

Your stock is sold for ₹965.50 instead of ₹960 (₹4.50 more than what you were willing to sell for).

If you still want to sell the stock at ₹960, you can use SL or GTT.

This nudge is displayed only when the limit price is greater than or less than the LTP by 2% for equity and futures and 5% for options.