I HAVE PERSONAL EXPERIANCE OF THIS KIND IN A DIFFERENT SITUATION.
I REMEMBER THIS HAPPENED TO ME IN ACC. I AM TRADING IN ZEN SECURITIES, I PLACED MY SELL ORDER AT A PRICE, MY SELL ORDER WAS NOT EXECUTED BUT HIGH WAS REGIGESTED ABOVE MY PRICE AND SETTELED LOWER. I ONE MORE OCCATION MY STOPLOSS WAS TRIGGERED BUT THE HIGH IS LESS THAN MY TRIGGER PRICE.
MY FRIEND KRISHNAMURTY HAS SIMILAR EXPERIENCE WHILE TRADING IN ANAGRAM STOCK BROKING, HE PLACED A ORDER, DIDN,T EXECUTED BUT ABOVE HIS PRICE ORDERS EXCUTED (BE CAUSE THE DAY HIGH REGISTERED ABOVE HIS PRICE-PLACED)
WHEN I TOLD NO BODY ACCEPTED ( EVEN KRISHNAMURTY GARU) BUT HIS EXPERINCE MADE HIM FURIOUS, PLANNED TO WRITE TO SEBI AND NSE TRIED TO DOCCUMENT.....GOE WITH THE WIND....LEFT AFTER THE EMOTION DIED....
BUT IT HAPPENS... I AM THE I WITNESS.... EVEN TO THIS....I SAW I PUZZELED....
NOW SHARING......DIFFERENT MAGICS..DIFFERENT...MANAGEMENT TECHNIQUES...
-------------------------------------------------
Nifty futures drop 6.7% in seconds
Dealers say algo trade from large foreign institutional investors triggered freak crash
BS Reporter / Mumbai Apr 21, 2012, 00:33 IST
Flash crash — was the catch phrase among market players on Friday after a huge sell order dragged Nifty futures down by nearly seven per cent within a few seconds.
During afternoon trade, the Nifty April futures plunged to 5,000 from 5,300 levels with about 35,000 lots of Nifty futures getting traded in the space of a few minutes.The sharp drop in futures also dragged the underlying index, with the 50-share Nifty declining from 5,313 to 5,245 within a few seconds.
Nifty April futures finally closed at 5,304.8, down 0.96 per cent; while the benchmark Nifty closed at 5,290.85, down 0.78 per cent.
According to market buzz, the sell order was placed due to an algorithmic trading error by a leading foreign institutional investor.
Market participants said the order didn’t specify a selling price, which resulted in a large supply of shares. “A huge sell order got punched without a ‘sell price’. The order got executed till the last available trade,” said the head of derivatives with a domestic brokerage.
Typically, institutions, while executing large quantity trades, space these out, so that the impact on price is minimal.The National Stock Exchange said the trading systems worked normally and all the trade executions were within the price limits prescribed by the market regulator. “The exchange is examining the causes for the sudden fall in the Nifty, as part of normal investigation procedure. No trades were cancelled or annulled by the exchange,” said NSE in a statement.
“Even though the trade quantity was relatively not very high, low trading volumes deepened the fall,” said a dealer.The average daily trading turnover for the derivative segment this month is Rs 99,272 crore, down 22 per cent compared to this year’s average of Rs 1,26,718 crore. The derivative market turnover on NSE stood at Rs 1,44,562 crore on Friday.
“The market bounced back after the fall, which indicates that the trade was on account of a punching error. Given the low volumes in the past couple of days the impact cost has gone up and this was clearly evident in Friday’s fall,” said Yogesh Radke, head of quantitative research at financial services company Edelweiss Securities.
The incident refreshed memories of last year’s Muhurat day trading when the Bombay Stock Exchange (BSE) had to annul all its trades due to unusually high volumes. On October 26, 2011, BSE had cancelled all derivatives trades during the Muhurat session after volumes shot up ten times its normal numbers.
Also, in June 2010, the Reliance Industries stock had crashed nearly 20 per cent on execution of a large ‘sell’ order using algo. The order, which appeared to be a punching error , saw the Sensex plunge more than 600 points the moment it was executed.
Last month, the Securities and Exchange Board of India (Sebi) announced detailed guidelines for algorithmic trading to maintain order in the market. The new rules will come into affect in the next few weeks
I REMEMBER THIS HAPPENED TO ME IN ACC. I AM TRADING IN ZEN SECURITIES, I PLACED MY SELL ORDER AT A PRICE, MY SELL ORDER WAS NOT EXECUTED BUT HIGH WAS REGIGESTED ABOVE MY PRICE AND SETTELED LOWER. I ONE MORE OCCATION MY STOPLOSS WAS TRIGGERED BUT THE HIGH IS LESS THAN MY TRIGGER PRICE.
MY FRIEND KRISHNAMURTY HAS SIMILAR EXPERIENCE WHILE TRADING IN ANAGRAM STOCK BROKING, HE PLACED A ORDER, DIDN,T EXECUTED BUT ABOVE HIS PRICE ORDERS EXCUTED (BE CAUSE THE DAY HIGH REGISTERED ABOVE HIS PRICE-PLACED)
WHEN I TOLD NO BODY ACCEPTED ( EVEN KRISHNAMURTY GARU) BUT HIS EXPERINCE MADE HIM FURIOUS, PLANNED TO WRITE TO SEBI AND NSE TRIED TO DOCCUMENT.....GOE WITH THE WIND....LEFT AFTER THE EMOTION DIED....
BUT IT HAPPENS... I AM THE I WITNESS.... EVEN TO THIS....I SAW I PUZZELED....
NOW SHARING......DIFFERENT MAGICS..DIFFERENT...MANAGEMENT TECHNIQUES...
-------------------------------------------------
Nifty futures drop 6.7% in seconds
Dealers say algo trade from large foreign institutional investors triggered freak crash
BS Reporter / Mumbai Apr 21, 2012, 00:33 IST
Flash crash — was the catch phrase among market players on Friday after a huge sell order dragged Nifty futures down by nearly seven per cent within a few seconds.
During afternoon trade, the Nifty April futures plunged to 5,000 from 5,300 levels with about 35,000 lots of Nifty futures getting traded in the space of a few minutes.The sharp drop in futures also dragged the underlying index, with the 50-share Nifty declining from 5,313 to 5,245 within a few seconds.
Nifty April futures finally closed at 5,304.8, down 0.96 per cent; while the benchmark Nifty closed at 5,290.85, down 0.78 per cent.
According to market buzz, the sell order was placed due to an algorithmic trading error by a leading foreign institutional investor.
Market participants said the order didn’t specify a selling price, which resulted in a large supply of shares. “A huge sell order got punched without a ‘sell price’. The order got executed till the last available trade,” said the head of derivatives with a domestic brokerage.
Typically, institutions, while executing large quantity trades, space these out, so that the impact on price is minimal.The National Stock Exchange said the trading systems worked normally and all the trade executions were within the price limits prescribed by the market regulator. “The exchange is examining the causes for the sudden fall in the Nifty, as part of normal investigation procedure. No trades were cancelled or annulled by the exchange,” said NSE in a statement.
“Even though the trade quantity was relatively not very high, low trading volumes deepened the fall,” said a dealer.The average daily trading turnover for the derivative segment this month is Rs 99,272 crore, down 22 per cent compared to this year’s average of Rs 1,26,718 crore. The derivative market turnover on NSE stood at Rs 1,44,562 crore on Friday.
“The market bounced back after the fall, which indicates that the trade was on account of a punching error. Given the low volumes in the past couple of days the impact cost has gone up and this was clearly evident in Friday’s fall,” said Yogesh Radke, head of quantitative research at financial services company Edelweiss Securities.
The incident refreshed memories of last year’s Muhurat day trading when the Bombay Stock Exchange (BSE) had to annul all its trades due to unusually high volumes. On October 26, 2011, BSE had cancelled all derivatives trades during the Muhurat session after volumes shot up ten times its normal numbers.
Also, in June 2010, the Reliance Industries stock had crashed nearly 20 per cent on execution of a large ‘sell’ order using algo. The order, which appeared to be a punching error , saw the Sensex plunge more than 600 points the moment it was executed.
Last month, the Securities and Exchange Board of India (Sebi) announced detailed guidelines for algorithmic trading to maintain order in the market. The new rules will come into affect in the next few weeks
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