Imagine this: you’re trying to place a market buy order on a fast-moving option contract. The current price (LTP) is ₹4.25, but by the time your order hits the exchange, it shoots up to ₹8.50 due to sudden volatility. You end up paying double, not great.
This is called slippage, and it can happen in volatile or illiquid instruments. That’s where Market Price Protection (MPP) steps in.
What is MPP?
MPP protects you from big price changes by placing a limit order within 0.5% to 25% of the current market price or your set trigger price.
Here’s how it works:
For Regular Orders
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When you place a buy market order, Upstox checks the Last Traded Price (LTP) and applies a percentage buffer to it.
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Your market order is then converted into a limit order at a price slightly above the LTP (for buy orders) or below the LTP (for sell orders).
For Triggered Orders like Stop-loss and GTT
When the trigger condition is met, MPP uses the trigger price (not LTP) to apply the buffer, ensuring even triggered orders don’t get filled at unfavourable prices.
A Simple Example
Say you place a market buy order for a stock trading at ₹100, and the MPP for that instrument is 2%.
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Without MPP: Your order could be executed at ₹103 or more if prices jump.
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With MPP: Your order is converted into a limit order with a ceiling price of ₹102 (₹100 + 2%). Your order will execute only if sellers are available at ₹102 or below.
Similarly, for a market sell order, if the LTP is ₹100 and the MPP is 2%, the limit price becomes ₹98, ensuring your shares aren’t sold for less than that.
MPP Percentage Breakdown
Upstox uses different MPP percentages depending on the instrument and price range. Here’s a snapshot:
| Instrument Type | Price Range (₹) | MPP % |
|---|---|---|
| Equity & Index Futures | < 50 | 3.00% |
| > =50 to < 500 | 2.00% | |
| >= 500 to < 10000 | 1.00% | |
| >= 10,000 | 0.50% | |
| Index Options | < 5 | 15.00% |
| > =5 to < 10 | 10.00% | |
| > =10 to < 50 | 5.00% | |
| > =50 to < 200 | 4.00% | |
| > =200 to < 500 | 3.00% | |
| > = 500 | 1.50% | |
| < 2 | 5.00% | |
| > = 2 to < 5 | 3.00% | |
| > = 5 to < 10 | 2.00% | |
| > =10 | 1.00% | |
| Stock & Commodity Options | < 2 | 25.00% |
| > = 2 to < 5 | 10.00% | |
| > = 5 to < 10 | 8.00% | |
| > = 10 to < 25 | 7.00% | |
| > = 25 to < 50 | 5.00% | |
| > = 50 to < 100 | 3.00% | |
| > = 100 to < 200 | 2.50% | |
| > = 200 to < 500 | 2.00% | |
| > = 500 | 1.00% | |
| Commodity Futures | < 50 | 5.00% |
| > = 50 to < 500 | 2.50% | |
| > = 500 to < 10,000 | 2.00% | |
| > = 10,000 | 1.00% | |
| Currency Futures | All | 2% |
| Currency Options | All | 5% |
Where is MPP Applied?
MPP is automatically applied to market orders on Stock Options, Commodity Options, and Multi-position square-offs. For large trades that are sliced into smaller parts, each slice is individually protected under MPP, ensuring better execution quality throughout.
You’ll know MPP is active on your order when you see a shield icon with the message:
“Market order protected by MPP” on the order placement screen.
Key Benefits of MPP
- More Trading Options: Enables market-like orders even on instruments where exchanges have restrictions, like Stock options. Market and SL-Market orders are not allowed in Stock Options due to exchange restrictions. MPP acts as a workaround by enabling users to place market-like orders that are fast and price-protected, helping reduce manual effort and delays.
- Reduced Price Slippage: Protects against sudden price spikes or drops, particularly during volatile conditions. Market and SL-Market orders are not allowed in Stock Options due to exchange restrictions. MPP acts as a workaround by enabling users to place market-like orders that are fast and price-protected, helping reduce manual effort and delays.
- Better Execution Control: Combines the speed of market orders with the boundaries of limit orders.
- Lower Impact Costs for sliced orders: Especially useful for large orders placed through order slicing, helping to avoid poor fills.
- No Manual Action Required: MPP is applied automatically wherever applicable—you don’t have to enable it manually.
Important Considerations
1. Order Execution
Since your market order becomes a limit order:
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If the market price moves outside the protected range, the order may remain Open.
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You may need to manually adjust the price or switch to a direct limit order for faster execution.
2. Margin Requirements
Margins are calculated based on the MPP limit price, not the LTP.
For example:
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Buying 100 shares at ₹500 with 3% MPP = Margin required for ₹515 per share.
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Even if the trade executes at ₹500, you’ll need funds for ₹51,500 at the time of placing the order.
Plan accordingly if you’re trading with leverage or limited funds.
