Faulty price feeds in F&O contracts disrupt trading, brokers approach NSE

Erroneous price feeds for certain futures and options (F&O) contracts disrupted trading activity on Thursday, expiry day for weekly derivatives.

Several brokers cautioned investors and some halted trading in Bank Nifty contracts, the second-most traded index derivatives, citing irrational gap between ‘buy’ and ‘sell’ quotations.

“Due to an issue with the price feeds for Bank Nifty options received from the exchange, all market orders on Bank Nifty option contracts have been blocked. Please use limit or stop-loss orders,” read a notification sent out by Zerodha to its clients. The country’s largest broker in terms of active clients sent out several notifications to its clients through the day cautioning investors.

An NSE spokesperson said trading members have reached out to the exchange over disruption in trading and it was examining the issue.

Several traders took to social media to raise the issue highlighting difficulties in executing trades and settling outstanding positions.

Industry players said dynamic circuit filters prevented trading from getting executed at irrational prices.

Some market players said the glitch in exchange price feeds led to high volatility in banking stocks.

Bank Nifty index fell 2.63 per cent on Thursday, underperforming the benchmark Nifty, which fell just 0.32 per cent. Shares of IndusInd Bank, Axis Bank and Kotak Mahindra Bank fell more than 3.5 per cent each.

This is not the first time NSE has been hit by such a glitch. In September 2019, NSE system faced trading outage with investors unable to place orders for 15 minutes. Back then, error had occurred due to connectivity issued with a service provider.