Product Types: CNC, MIS and NRML

Next to every order is a small dropdown: CNC / MIS / NRML, or names to that effect. It is easy to ignore. Do not. It decides whether you are buying a share or renting a bet for a few hours.

CNC — Cash and Carry (delivery)

You pay the full amount and the shares are credited to your demat account on T+1. You own them. Hold them for a day or twenty years.

• Full money required upfront — no leverage
• Shares delivered to your demat account
• No automatic square-off, ever
• You receive dividends, bonus shares and every other corporate action
• Gains taxed as capital gains, with the long-term rate available after one year

This is what investing looks like. If you intend to hold a share, this is the option.

MIS — Margin Intraday Square-off

An intraday product. You get leverage — trade a position larger than your cash — but the position must be closed the same day.

• Requires only a fraction of the value as margin
• No shares are delivered; nothing enters your demat account
• Automatically squared off by your broker near the end of the day
• You can also short sell — sell first, buy back later the same day

Intraday positions must be closed before your broker's auto-square-off deadline. The exact time depends on the broker, segment and whether the stock is covered by the Closing Auction Session. As of 12 September 2026, Zerodha lists 3:12 PM for CAS stocks and 3:25 PM for non-CAS stocks. Other brokers may use different timings.

Worked example

You have ₹20,000 and the stock is ₹500.

CNC: you buy 40 shares. If it rises to ₹520, you gain ₹800 (4%). The shares are yours.

MIS with 5× leverage: ₹20,000 supports 200 shares. It rises to ₹520 and you gain ₹4,000 (20% on your money). Excellent.

But it falls to ₹480 instead, and you lose ₹4,000 — 20% of your capital on a 4% move in the stock. Leverage multiplies both directions with complete indifference.

NRML — Normal

Mostly used for futures and options, and for currency and commodity positions. It allows a position to be carried overnight, up to the contract's expiry, at full exchange-specified margin.

There is no auto square-off during the day, but derivatives carry their own obligations — daily mark-to-market, margin calls if the position moves against you, and expiry.

If you are a beginner, this is not where to start. Derivatives magnify outcomes far more than intraday equity leverage does, and most retail participants in the segment lose money.

The mistake that costs real money

Someone buys 100 shares intending to hold them. The product type is left on MIS — perhaps the broker's default, perhaps a leftover from a previous trade.

At the auto-square-off deadline the broker squares it off. The buyer never owned anything. If the stock fell during the day, the loss is locked in. If it rose, the gain is booked — but the intended investment never existed, and they own nothing the next morning when the stock gaps up on results.

Margin, in one paragraph

Margin is money or securities you deposit so the broker and the exchange are protected against your position moving against you. SEBI's peak margin rules require it to be collected upfront, so leverage is far lower than it was years ago. You can also pledge shares you hold to receive margin against them, with a haircut. Pledged shares remain yours, and you keep dividends and corporate action entitlements.

Quick comparison

Key takeaways

• CNC means you pay in full and genuinely own the shares.
• MIS gives leverage but the position is force-closed the same day.
• Leverage multiplies losses exactly as much as gains — a 4% move can cost 20% of your capital.
• NRML is for carrying derivatives positions and is not a beginner's product.
• Check the product type on every single order until checking becomes automatic.

Check your understanding

0 of 3 answered

1. 1.You buy shares under MIS and do nothing. What happens by the end of the day?

   They move to your demat accountThe broker squares off the position automaticallyThey convert to CNCNothing, they carry forward
2. 2.With ₹50,000 and 5× leverage, you take a ₹2,50,000 position. The stock moves 4% against you. What is your loss as a percentage of your own money?

   4%10%20%40%
3. 3.Which product type is right for a share you intend to hold for three years?

   MISNRMLCNCAny of them