What is MIS vs CNC vs NRML? Beginner Order Types Explained
Every order you place in the Indian stock market needs a product type. It is one of the first choices you make, right next to buy or sell, and quantity. Most beginners either ignore this dropdown or pick whatever was selected last time. That is how people end up holding a stock they meant to sell the same day, or getting auto-exited from a position they wanted to keep for months.
The three product types you will see most often are MIS, CNC and NRML. Each one tells the exchange and your broker how long you intend to hold the position and how much margin you are allowed to use. Get this right and your trading matches your intention. Get it wrong and you can lose money for reasons that have nothing to do with whether you picked the right stock.
MIS: Margin Intraday Square-off
MIS is for trades you plan to close on the same day. The word intraday means within the day, and square-off means the position is closed out. If you buy a stock using MIS, that position must be closed before the market closes. You do not need to remember to do this yourself, the system closes it for you automatically before 3:30 PM IST, usually with a cutoff a few minutes earlier so the order has time to execute.
The main reason traders choose MIS is leverage. Since the broker knows you are not going to hold the position overnight, they let you trade with more exposure than your actual cash would normally allow. This means both your profit and your loss get magnified compared to using your own capital alone. MIS brokerage is also typically lower than delivery-based charges, since it is priced for frequent, same-day trading.
The risk with MIS is twofold. First, leverage cuts both ways, a small adverse move can wipe out a larger portion of your capital than you expected. Second, if you forget you are in an MIS position, the platform will force-close it before the close whether you like the price or not. This is exactly the mistake many beginners make, they buy a stock meaning to hold it for months, accidentally leave it on MIS, and watch it get squared off that same afternoon, sometimes at a loss.
CNC: Cash and Carry
CNC is for delivery trades, meaning you are buying the stock to actually hold it, whether for a few days, a few weeks, or years. There is no leverage on the buy side with CNC, you pay the full amount for the shares, and there is no auto square-off. The position simply sits in your holdings until you choose to sell it.
In the real market, delivery trades also involve depository charges when you sell, on top of brokerage, since the shares move in and out of your demat account. Tenth Trader models these real-world costs so the simulated numbers match what a live account would actually show, including brokerage, STT, stamp duty, exchange charges, SEBI charges and GST, all calculated to the rupee.
CNC is the product type for investing rather than trading. If your plan is to buy a company and hold it because you believe in its long-term prospects, CNC is the correct choice. There is no forced exit, no leverage-driven risk, and no daily deadline hanging over the position.
NRML: Normal
NRML applies to futures and options positions that you intend to carry beyond the current trading day. The name Normal is a little misleading, it does not mean the default or most common order type, it specifically means a position that is not restricted to intraday and can be carried forward across sessions, subject to margin requirements and the contract's own expiry rules.
This matters because F&O contracts already have their own lifecycle, a futures contract or an options contract expires on a fixed date regardless of what product type you used. NRML does not mean indefinite, it means you are not forcing an intraday square-off on top of the contract's natural expiry. On Tenth Trader, F&O positions behave like NRML by default so they carry forward day to day, though short option and futures positions still follow the exchange's own square-off and expiry rules rather than an intraday cutoff.
Why the product type you choose actually matters
The product type is not a minor setting, it changes three things at once, how much margin you are given, when the position is forced to close, if at all, and what charges apply to the trade.
- Margin and leverage: MIS and NRML typically allow more exposure than your cash balance alone, CNC does not extend leverage on the buy side.
- Timing: MIS positions are forced shut before market close. CNC and NRML positions carry forward until you decide to exit or the contract expires.
- Charges: brokerage, STT and other charges are structured differently for intraday equity, delivery equity and F&O. An MIS trade and a CNC trade on the exact same stock can have a different cost breakdown purely because of the product type selected.
Compare an MIS and a CNC trade side by side in the free brokerage calculator
The most common beginner mistake is picking MIS out of habit for a stock you actually wanted to hold. The trade gets force-closed near the end of the day, often at a worse price than what you would have gotten by choosing to exit on your own terms, or not exiting at all. The reverse mistake also happens, using CNC when you meant to day-trade, which means you do not get the leverage you were expecting and your capital gets tied up longer than planned.
A simple decision framework
Before placing any order, ask yourself one question, am I closing this position today? If the answer is yes, and it is an equity trade, use MIS. If it is an intraday options trade, the equivalent intraday product applies there too.
If the answer is no, and you are buying a stock to hold for the long run, use CNC. You take full ownership of the shares with no forced deadline.
If you are holding a futures or options position for more than a day, use NRML, keeping in mind that the contract's own expiry date still applies regardless of the product type.
This one question, am I closing this today, resolves almost every case a beginner runs into. The product type should follow your intention, not the other way round.
Why practising this on paper first is worth it
Mixing up MIS, CNC and NRML is one of those mistakes that costs real money the first time it happens with real capital, an unwanted auto square-off, a leveraged position you did not mean to take, or charges you did not expect. None of these are about picking the wrong stock, they are about picking the wrong product type for what you were trying to do.
Tenth Trader lets you place MIS, CNC and F&O orders with live NSE prices and real simulated charges, using virtual capital of ₹1,00,000, so you can make this mistake, understand why it happened, and fix your habit, without it costing you a single real rupee.