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Fat Finger' Trade On NSE May Have Cost Broker 250 Crore Loss Times

A fat finger trade on the NSE derivatives segment late Thursday may have caused a loss of Rs 200-250 crore to an unknown broking house. The trader sold 25,000 lots of Nifty call options at a very low price of Rs 0.15 when the market price was around Rs 2,100, due to accidentally pressing the wrong key. Fat finger trades refer to erroneous trades caused by inputting incorrect values by mistake. Some exchanges and broking houses have systems to catch and cancel such errors, but in this case no such system intervened.

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85 views2 pages

Fat Finger' Trade On NSE May Have Cost Broker 250 Crore Loss Times

A fat finger trade on the NSE derivatives segment late Thursday may have caused a loss of Rs 200-250 crore to an unknown broking house. The trader sold 25,000 lots of Nifty call options at a very low price of Rs 0.15 when the market price was around Rs 2,100, due to accidentally pressing the wrong key. Fat finger trades refer to erroneous trades caused by inputting incorrect values by mistake. Some exchanges and broking houses have systems to catch and cancel such errors, but in this case no such system intervened.

Uploaded by

PrashantPatil
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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6/3/22, 7:25 PM ‘Fat finger’ trade on NSE may have cost broker ₹250 crore loss - Times of India

Printed from

‘Fat finger’ trade on NSE may have cost broker ₹250


crore loss
TIMESOFINDIA.COM | Jun 3, 2022, 09.57 AM IST

MUMBAI: A ‘fat finger’ trade, an error caused by punching a wrong key, hit
the NSE’s derivatives segment late on Thursday that could have caused a
loss of Rs 200-250 crore to an unknown broking house which placed the
order. This makes it the biggest such trading mistake in India.On Thursday,
between 2. 37pm and 2. 39pm, a trader sold 25,000 lots of Nifty call
options at 14,500 strike at prices as low as Re 0. 15. At that time, the
market price for this contract was about Rs 2,100. Each lot of Nifty contract
is for 50 numbers. So the estimated total loss is between Rs 200 crore.

What is fat finger trade?

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It is an erroneous trade due to puching a wrong key on the keyboard or clicking the mouse at wrong place. For example a
trader sellls? one lakh shares at Rs 1,010 while the market price is Rs 1,100. The result is loss of Rs 90 lakhs. So it can be a huge
loss for the initiator, and windfall gains for others.

How do such trades get fixed?

Some broking houses and exchanges have in-house system or filters to catch and stop such trades. Some exchanges annul
https://timesofindia.indiatimes.com/business/india-business/fat-finger-trade-on-nse-may-have-cost-broker-250-crore-loss/articleshowprint/91975252.cms 1/2
6/3/22, 7:25 PM ‘Fat finger’ trade on NSE may have cost broker ₹250 crore loss - Times of India

such trades with a warning. Parties involved in such trades settle it among themselves too. If taken insurance can help too.

Major fat finger trade that led to big fat losses abroad and in India:

$600 billion inflated order for blue-chips in 2014 at a Japanese exchange.

$ 28 billion wrong transfers into several accounts in 2018 at Deutsche Bank.

Rs 60 crore loss an Emkay Global Trader caused in Oct 2012 in Nifty contracts. It also led to a near 15% drop in the Nifty
index, but failed to trigger a market-wide circuit breaker.

A recent media report said that to neutralise fat finger trades from hitting its trading engine, the NSE was to put an alert system
for trades that were at a substantial premium or discount to the market price. However, on Thursday, no such system had
kicked in, an investment adviser said.

https://timesofindia.indiatimes.com/business/india-business/fat-finger-trade-on-nse-may-have-cost-broker-250-crore-loss/articleshowprint/91975252.cms 2/2

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