The National Stock Exchange said the orders were of non-algorithmic in nature, and it was investigating the member. (Algorithmic trading is a system for trading through a programmed software that can make around 800 transactions per second). Since dealers could not execute any orders in the cash market in the wake of trading halt, investors, it is argued, would not have lost their money. Though Emkay Global had closed out the positions arising out of ‘erroneous’ trades, brokers felt it would have suffered heavy losses.

According to V. Nagappan, a leading stock broker, the market circuit filter got triggered probably because of wrong sell orders entered by the broker concerned and market was frozen since it touched the 10 per cent limit.

Though there was a temporary panic among traders, the situation was saved by the timely action of the Exchange.

However, long-term investors were not be affected by this swift/ wild short term gyrations, he said.

R. Pattabiraman, stock and commodity consultant based in Chennai, said the NSE had put in place a strong surveillance system. The stock brokers should ensure the correctness when large orders were loaded in the system, he said.


Dubious orders cause trading crash on NSEOctober 6, 2012