What is a Disclosed Quantity Order?
Disclosed Quantity is an exchange order system that is used to mask the size of an order. It allows clients to disclose only part of their actual buy/sell order quantity to the market. Once the disclosed quantity is specified by a client, the order is sent to the exchange and only the disclosed quantity will be shown on the market screen.
For example, Mr Lal places an order to buy 2,000 shares of HDFC with a disclosure quantity of 200. Hence, orders for 200 shares are displayed to the market one at a time. After the first order (of 200) is executed, the next order is released, and so on. This continues till 2,000 shares are purchased.
- The disclosed quantity, if entered, should not be greater than or equal to the total order quantity.
- The disclosed quantity feature cannot be used in the pre-open and post-market closing sessions.
- Orders are matched and executed based on the price-time priority principle. Hence, as per the given example, after the first order of 200 shares is executed, the next order of 200 shares is released. All orders placed in the market before this order will get execution priority (given that they are placed earlier or at the same price). This continues till the entire order is complete.
- Each exchange has different disclosed quantity requirements:
|Exchange||Disclosed Quantity Condition|
|NSE/BSE (equity)||Cannot be less than 10% of an order. |
|NSE (CDS)||Cannot be less than 10% of an order. |
|MCX (commodity)||Disclosed quantity feature not permitted|
|F&O (stock and index)||Disclosed quantity feature not permitted|
All brokers send these orders to the exchange and order matching is done via exchange intelligence.