MPP stands for Market Price Protection. This feature helps safeguard market orders from being executed at unfavourable prices due to price slippage in an illiquid or volatile market.
For instance, if you place a BUY order using Market Price when the Last Traded Price (LTP) is ₹100, but sellers are only available at ₹150 due to poor liquidity, your order would execute at ₹150, resulting in a loss of ₹50. To protect against such losses, market orders in options are placed with protection.
With MPP in place, if you place a BUY order using Market Price, a 10% protection is automatically applied, converting your order into a Limit order at ₹110. If sellers are available at a price below ₹110, your order will execute. If not, it will remain open as a Limit order and expire at the end of the trading day.