What is After Market Order (AMO) & How It Works?

I am a regular trader in the market. One day I noticed that a stock that I was holding made a sudden movement during the last hour of the trading session. I was of the view that the stock will open at a high the next day and then start moving downwards. So I decided to sell the stock as soon as the market opens. However, due to some circumstances, I was not able to execute my trade and that opportunity was gone.

Now the question that arises is how you could have avoided this. The answer is “After Market Order (AMO)”. After market order is a facility that brokers provide to the traders and investors to purchase or sell stocks after or before trading hours. NSE and BSE open at 9.15 a.m. and close at 3.30 p.m. Saturday and Sunday are the market holidays. If you have been aware of the AMO facility you would have been able to place an order after or before the market hours and made a profit on the stock you are holding in your demat account.

How AMO Works?

AMO can be placed when the market is closed. The orders placed will be sent to the exchange before the opening of the market the next day. To place an AMO order you need to log in to your broker's account online and while placing the order you must select the “AMO” option. The timings to place an AMO order will vary from broker to broker.

You must ensure that there is sufficient cash balance in the trading account to place an AMO order. Before placing a sell order you must ensure that stock is available in your trading account. If there is any shortfall of funds or securities in your account, the order will be rejected by the broker before sending it to the exchange.

Also read - What is Pre-Open Market Session in Stock Market and How It Functions?

Features of AMO

· AMO can be placed as “Market Order” or “Limit Order”

· Modification or Cancellation can be done

· Bracket order and cover order cannot be placed using AMO

· AMO does not support stop loss orders and disclosed quantity orders

· The price range for limit order in AMO for a stock would be specified by the exchange

Benefits of AMO

· Those investors who are not able to track the market during trading hours, this facility is useful to them. They can analyze all the news and information along with the market behaviour before placing an AMO.

· You may modify or cancel an AMO in case there is any negative development over the night.

· You may place SIP orders in stock using this facility.

· Currency and commodity segments also support AMO.

· In case of any urgent or unforeseen circumstances, AMO is a very useful facility.

The above mentioned are some of the key features and benefits that one must know before using the AMO facility. With the introduction of AMO, trading and investing in stocks has become more convenient. This added facility is much more beneficial for those who are not able to participate in the stock market due to time constraints.