Update: My attributions to pre-open were based on the similarities to this all frequent event every day when the pre open routines works to a variation of +/- 30% over the last closing price. Also as ET Now reports, the cancelation of these trades is again in question because of the uniquely wedded Day trading system in India whence those who closed the trades at 3 pm are the main issue of why the flashed market trades cannot be closed and Emkay can be hung out to dry with these INR 650 Crores in trades. (INR 6.5 B) as it is adequately capitalised.
The much publicised “flash crash” on the NSE in India was actually part of a daily phenomenon where proprietary desks of brokers with risk give exploratory trades without any circuit breakers and other exchange controls in play during the first 15 minutes and no trades are consummated.
The Flash crash literally happened half an hour after the normal session began and the canceled trades saved the markets $60 B before another Preopen session was imposed at 10.02 AM and session began at 10.05 The Nifty ended down barely 50 points with Bank Nifty resuming under pressure and HCL Technologies and Infy getting ready for Results season and the new rupee vs Q2 performance at the Rupee’s lowest
The broker Emkay involved in passing such “erroneous” 59 trades on behalf of institutions is likely just using the template to look for wa swaying trend to a correction in a more “macro” pr “global” use of technological failures than the high Frequency trading algorithms used for institutional advantage legally in the US. Hopefully, the broker will be investigated throughly and thence the pre open session per se which gives the Rupee a 15 minute headstart on the Equities in trading as it opens without a Pre Open session at 9 AM IST
- Indian Flash Crash Caused by 59 Erroneous Orders (bloomberg.com)
- Freaky Friday: 10 answers on NSE’s flash crash (profit.ndtv.com)
- There Was A Massive Flash Crash In India (businessinsider.com)
- An Indian flash crash (ftalphaville.ft.com)
- Trading errors rattle Indian stock market (vancouverdesi.com)