Leading stock exchange NSE has cautioned stock brokers against executing orders which appear to be non-genuine, leading to deviation in the normal price discovery process.
This came after the National Stock Exchange’s (NSE) derivatives segment witnessed a ‘fat finger’ trade on Thursday that may have caused a loss of Rs 200-250 crore to a brokerage house. This could be the biggest trading mistake in the domestic market’s history.
In market parlance, a ‘fat finger’ trade is an erroneous action resulting from pressing a wrong key.
In a circular, NSE asked its trading members to strictly desist from entering or executing transactions which prima facie appear to be non-genuine on their own accountand refrain from indulging in practices which lead to aberrations in the order book.