While placing orders during their trading, many people come across the term ‘disclosed quantity‘ and generally they get confused.
Reality is that not many retail investors use this feature; not because of their lack of awareness about this feature, but of the fact that ‘disclosed quantity’ feature is only helpful while placing large quantity of orders.
There are chances that you will not use this feature unless you are an HNI (High Networth Investor), but it is better safe than sorry; knowledge always helps.
So, here we are going to answer questions such as, ‘what is disclosed quantity in share market?’ and many more related terms.
What is Disclosed Quantity?
Disclosed Quantity, also known as Disc Quantity, is a feature that you can use to disclose only a part of the total order quantity.
Didn’t get it? Let’s take an example.
Say, you want to buy 25,000 shares of ITC at the market price, which is ₹ 255.
You will place the order for 25,000 shares, but set the disclosed quantity to 5,000. Now, what does this mean?
You know that you have placed an order of 25,000 shares, but it will be shown to other traders that the order is only for 5,000 shares. And when the buy order for these 5,000 shares will get executed, the next 5,000 shares will be displayed in market depth.
But why to set disclosed quantity and not just to show all 25,000 shares as one order? Because, whether you buy or sell large quantity of shares, you get benefitted when you use disclosed quantity feature.
Let’s see, how you get advantage of disclosed quantity feature.
Advantage of Disclosed Quantity
Suppose, you don’t know anything about disclosed quantity, and going to place your buy order of 25,000 ITC shares.
What will you do? You log into your brokerage account and then place the market order (you can also place limit order) for 25,000 shares.
The last traded price, which is the market price, is ₹ 255. So, you are thinking that your order will cost you around ₹ 63,75,000 (25000 x ₹ 255).
But don’t you think, as you place the order for this many shares, which is really a big number, other traders will increase the ask price because your demand is high.
And when they (sellers) increase the ask price from ₹ 255 to, let’s say, ₹ 260 or more, you will be in loss because then you need to pay ₹5 more on each share.
So, because of increase in share price, you will be paying ₹ 1,25,000 extra as now you need to pay ₹ 65,00,000 (25000 x ₹ 260) for the same 25,000 shares.
This all happened because of the sudden jump of demand of ITC shares. And that is where you see the advantage of disclosed quantity.
If you display other traders (via market depth)that you are only placing an order of 5,000 shares instead of 25,000 shares, they will anticipate that there is no any high demand which will result in you buying 25,000 shares through five orders of 5,000 shares (which you just need to place only one time) at the price you anticipated i.e. ₹ 63,75,000 (25000 x ₹ 255).
Here we have taken the example of buy order, but you can place the sell order while using the disclosed quantity feature.
Be it a sell or buy order, there are certain conditions that apply while using this feature.
Disclosed Quantity Conditions
- Disclosed quantity is only allowed in Equity, Currency, and Commodity.
- Equity: Disc quantity cannot be less than 10%
- Currency: Disc quantity cannot be less than 10%
- Commodity: Disc quantity cannot be less than 25%
- Disclosed quantity cannot be used in F&O segment.
- Disclosed quantity is not allowed in Pre-market and Post-market sessions.
- Disclosed quantity should neither be equal to nor greater than the actual order quantity.
How to use Disclosed Quantity feature?
It doesn’t matter, which broker you have your demat account with, you can get to see disclosed quantity feature in every broker’s trading interface.
Here, we will show you, how you can use disclosed quantity in zerodha.
Remember, our example of buying 25,000 ITC shares? We are going to do the same here.
Steps for disclosed quantity zerodha:
- Choose the stock you want to buy/sell and the exchange (BSE/NSE).
- Decide order type: Regular, Cover, AMO, etc.
- Choose among Intraday and Long-term order.
- Enter the quantity of shares you want to buy or sell and the price i.e. market price or limit price.
- Click on ‘More Options’ and enter the disclosed quantity.
- Hit the blue ‘Buy’ button.
Frequently Asked Questions (FAQs) about Disclosed Quantities
Disclosed quantity in share market is a feature that you can use while placing large equity orders.
Traders use this feature to display only a part of total placed shares’ order to maintain the supply and demand in the market.
You can use disclose quantity feature during both buying and selling of shares.
There are some conditions that you need to follow while using this feature like you cannot use it in F&O segment and in pre- and post-market sessions.
Every broker provides this feature with their trading interface, so whenever you need it you can use.
In this article, we have answered ‘what is disclosed quantity in trading?’ and discussed the advantages and conditions to use this feature.
But, still if you find any difficulty while getting the essence of the topic, please comment down below your question.
Until then, Happy learning!