CNC Order

Overview

CNC denotes Cash N Carry. A Cash n Carry (CNC) order is a significant concept in the stock market, representing a specific approach to buying and holding securities. This order type is employed when investors intend to retain ownership of stocks in their portfolio for more than a single trading day.

What Is CNC Order in the Stock Market?

CNC in the stock market means Cash N Carry, a term used when purchasing stocks for a duration beyond a single day, distinguishing it from intraday orders where stocks are sold on the same day. CNC is employed in delivery-based trading, aiming to have company shares reflected in the Demat account. The delivery of stock occurs two days after the transaction (T+2), when the shares become visible in the Demat account. Sufficient holdings in the Demat account are required for selling stocks.

CNC, as a product type, doesn't prohibit same-day selling; however, such trades are considered intraday, incurring relevant brokerage charges. CNC operating in the Equity Segment of BSE & NSE, CNC in share market facilitates buying or selling shares for delivery. Delivery involves holding purchased stocks, allowing flexibility in selling them after any duration, without a specified time limit.

Upon using CNC for stock purchases, the shares are transferred to the Demat account after T+2 days. A Demat account, short for dematerialization account, streamlines the storage of various investments electronically, including shares, bonds, government securities, Mutual Funds, Insurance, and ETFs, functioning akin to a bank account for holdings.

How Does a CNC Order Works?

In equities trading, CNC (Cash and Carry) is a type of trading where you buy shares using your available cash and carry them to the next trading day. In CNC trading, you can buy shares at any time the stock market is open, and you can hold them for as long as you want, including selling them after 24 hours. However, it's important to note that the price at which you can sell the shares after 24 hours will depend on the market conditions and the prevailing market price at that time.

How to Place CNC Order in Orca Platform?

In the Orca platform, Select the stock to be bought/ sold from the list. Click on Buy, Now select the type of order as either CNC or MIS.

In case of intraday trading, select MIS. If you want to buy and sell the same day, then select MIS.  In case of delivery within T+2 days, then it’s a CNC market order in the share market and so select CNC and the no. of stocks to be sold. Click Buy. Now the trade has been completed from CNC order. Now the settlement takes place in T+2 days and it would be reflected in the trader's demat account on T+2 days.

In CNC order, the no. of stocks can be bought only based on the available fund with the demat account.

For instance, if a trader has only Rs.10000, he can buy stocks using CNC order only for Rs. 10000.If he wants to buy more stocks, then trader must transfer funds to demat account and then proceed with CNC order.

Traders who preplan for the stock purchase and select only the CNC order. Thus, in CNC order exposure limit is not applicable. 

There is an option in the stock market, that an intraday order can be converted into CNC order. For this, buy stocks using Intraday order using exposure limits, filter stocks which are making profit and sell those stocks using CNC order. In CNC order, it is possible to convert the stocks with the margin that you have in hand. It is to be noted that the market squares off time is 3.15 pm. Hence, before this time, the trader has to cut his position or convert it to CNC order. Else, the trader’s position will be squared off automatically.

Summarize:

The CNC (Cash and Carry) facility is utilized in the Equity Segment of BSE & NSE for buying or selling shares for delivery. After a successful trade, it takes T+2 days for the transaction to reflect in the Demat account. The purchased stocks can be sold afterward. Buying stocks is limited to available funds, and there's no exposure limit for CNC orders. Additionally, stocks initially bought for intraday trading can be converted to CNC orders.

To Know more on CNC order, refer https://youtu.be/uv34a83V5KE

Frequently Asked Questions

What Is CNC Limit in the Stock Market?

In the stock market, the CNC (Cash and Carry) limit refers to the amount of funds available for buying stocks for delivery, with no specific exposure limit for CNC orders. This limit is determined by the investor's available cash balance with the Stock Broker.

What Is CNC in Share Trading?

CNC (Cash and Carry) in share trading refers to a mode where investors buy or sell stocks for delivery, and the transaction settles after T+2 days. It requires the use of available funds, and there's no exposure limit for CNC orders in the stock market. Additionally, stocks bought for intraday trading can be converted to CNC orders.

What Is Delivery in Stock Market?

In the stock market, delivery refers to the process of transferring actual shares from the seller's Demat account to the buyer's account. It signifies the long-term ownership of the stocks, and the transaction settlement occurs after T+2 days. Delivery-based trading contrasts with intraday trading, where positions are squared off within the same trading day.

Difference Between CNC Limit and CNC Market?

In stock trading, CNC (Cash and Carry) limit represents the amount of funds available for buying stocks for delivery. On the other hand, CNC market refers to executing buy or sell orders for delivery at the prevailing market price. The CNC limit is the allocated budget, while CNC market involves real-time transactions at market prices within that limit.

If I Buy Shares in CNC And Sell Same Day? What would happen?

If you buy shares in CNC (Cash and Carry) and sell them on the same day, it would be considered an intraday trade. However, CNC is typically used for delivery-based trading, so selling on the same day may lead to penalties or restrictions. It's advisable to use intraday trading segments like MIS (Margin Intraday Square Off) for same-day transactions to avoid such issues.