Protection Percentage :
While placing a market order on BSE (Not applicable for NSE), you can specify the maximum percentage deviation from the Current Offer / Bid up to which the market order can be executed. Consider the example where the Bid and Offer Price for a given stock is 99 and 100 respectively.
In case you place a market buy order with a protection percentage of 20% the order will go to the exchange as a market order of Rs. 120 and will be executed at Rs. 120 or at a better rate. However, in case it is found that there is no offer of Rs. 120 or better in the exchange this order will be suo moto cancelled by the exchange. In case of part execution of this order at Rs. 120 the remainder of the order will be converted to a limit order at Rs. 120.
In case you place a market sell order with a protection percentage of 20% the order will go to the exchange as a market order of Rs. 79.20 and will be executed at Rs. 79.20 or at a better rate. However, in case it is found that there is no bid of Rs. 79.20, the order will get cancelled. In case of part execution of this order at Rs. 79.20 the remainder of the order will be converted to a limit order at Rs. 79.20.