Broker places bad orders Nifty crashes 800 pts

[Singh]

The National Stock Exchange index Nifty crashed 800 points this morning, halting the trade, which the bourse blamed on erroneous orders worth Rs. 650 crore by a broker Emkay Global for one of its clients. The NSE said it is investigating the matter and the abnormal orders that resulted in multiple trades at low prices. In a statement after the incident, which halted the trade in cash markets for about 15 minutes, NSE said, "The market circuit filter got triggered due to entry of 59 erroneous orders which resulted in multiple trades for an aggregate value of over Rs. 650 crore.

"These orders have been entered by a trading member Emkay Global Financial Services on behalf of an institutional client. "These non-algo market orders have been entered for an erroneous quantity which resulted in executing trades at multiple price points across the entire order book thereby causing the circuit filter to be triggered. These orders have been identified to a specific dealer terminal," it added.

On the other hand, BSE said the market at the exchange was working fine and there were no technical or other issues at the bourse. However, the BSE index Sensex also fell by about 200 points in reaction to the plunge in Nifty, as there are many common stocks on the two indices.

The incident occurred on a day when expectations were high for a sharp upward rally on the bourses following various reform measures approved by the Union Cabinet last evening, including on FDI in insurance and pension sectors.

At 1220 hours, the markets recovered some lost ground and Sensex was trading 177 points down at 18,880.98 points. The Nifty was down 58.35 points at 5,729.25 points.

Earlier in the morning, Nifty had fallen sharply by about 800 points or 16 per cent to a low of 4,997.6.

Nifty crashes 800 pts; NSE blames broker for bad orders - Hindustan Times

 

[Daredevil]

I heard that these days Broking agencies are using sophisticated algorithms to place orders. Could be one of this computer error?.

 

[Singh]

I heard that these days Broking agencies are using sophisticated algorithms to place orders. Could be one of this computer error?.

Those were being used in Wall street iirc numerous trades every second to make money from arbitrage.

 

[Tolaha]

I heard that these days Broking agencies are using sophisticated algorithms to place orders. Could be one of this computer error?.

It was not an algo error!

 

[sob]

I missed the opportunity to pick up some stocks at low prices.

 

[Tolaha]

Trading Error Jolts India Index - WSJ.com

Excerpts:

Erroneous orders placed by a brokerage halted trading on India's largest stock exchange and sent its main index crashing, temporarily eroding the value of the country's top 50 stocks by as much as $70 billion.

Most of the stocks recovered Friday after trading resumed on the National Stock Exchange. But the incident created panic among traders. The 50-stock Nifty index dropped as much as 16%, to 4880.20, in morning trading. When the market reopened after a 15-minute trading halt, the index recouped most of its losses and closed 0.7% lower, at 5746.95.

The orders have been identified to a specific dealer's terminal, it added, and were attributed to human error rather than electronic program trading. The value of the orders was about $126 million

 

[Tolaha]

I missed the opportunity to pick up some stocks at low prices.

The crash and the circuit filter that follows... all occur in a few seconds. It wouldn't be humanly possible to make a deal in those few seconds.

We would need some non-human approach in such cases I think!

 

[SADAKHUSH]

I missed the opportunity to pick up some stocks at low prices.

In North American markets they would cancel any such order filled. How about Bharatvarsh?