A bracket order (BO) is a type of advanced intraday order used in trading financial instruments like stocks, futures, and options. It involves placing three separate orders simultaneously to manage risk and protect profits.

BO is placed along with the main (Leg-1) order with a combination of a Stop loss order (Leg-2) to reduce a user’s loss and a Target price order (Leg-3) to take profits. 

In bracket order, the original order can be of buying or selling. But the other two orders are opposite to the original order. If the original order is to buy stocks, the other two will sell the stocks when the price reaches the limit. 

Traders use a bracket order to automate profit-taking and risk management, which helps minimize losses and maximize profits. However, the success of the bracket order depends on stock selection and price levels chosen. 

The position of the bracket order will automatically square off or exit by the system at the end of the trading session (i.e. by 3.20 PM) if the stop-loss or target order is not executed, or the trader has not manually exited the position.