On the 10th of July 2017 morning, NSE India has to stop trading due to a major technical glitch. This NSE India technical glitch is a major setback for the traders and investors as well as for the NSE exchange which is proposing to come up with their IPO very soon. You can see their IPO filing status on our upcoming issues page.
The Full Story of the Technical Glitch of NSE India
Let us discuss step-by-step how the disaster happened and how traders lost money. This was really a nightmare for all the traders.
Pre-Market Session
Monday morning is usually a busy day for the traders and brokers were the first day of the week. Today also traders were ready by 9:00 and the pre-market session started normally at 9:00 AM. Trading started at 9:10 AM. Initially, traders could not figure out the problem. Zerodha, a leading broker, sent messages to their clients that there is an issue with the data feeds. Till then the full NSE India technical glitch was not revealed.
Equity Cash Trades and FNO Trades
FNO trades were executing normally. Then traders noted that equity cash trades are not happening. There is a major gap between bid and offer prices. In many cases, even the offer prices have been quoted lower than the bid prices. You can check an instance in the image below.
Halt of Trading in NSE due to the Technical Glitch
Trading got halted and the NSE exchange was shut down at 9:55 AM. NSE announced that the new pre-market session will start at 10:30 and the normal market will start at 10:45. If failed again. The next announcement was that the pre-market session will start at 11:00 AM and the normal market will start at 11:15 AM. Once again trading failed.
Now when I am writing the post, NSE has again announced that the pre-market session will start from 12:15 PM and the normal market will start from 12:30 PM.
Impact on Traders and Investors
By the time trading halted at 9:55 AM about 77000 crores worth of trading was already done in FNO. Suppose a person has shorted Divis Lab at open the trading stopped due to a technical issue. After that and news came the stock can open 9%-10% higher in the new session. This type of situation can create major losses for the traders. There is an investor protection fund with all exchanges as regulated by SEBI. Now, how the exchange handles the technical glitch needs to wait and watch.
FAQs on Technical Glitch of NSE
A technical glitch in the stock market refers to any unexpected interruption or event which prevents traders and brokers from completing orders, adding liquidity, providing price quotations, and carrying out other activities necessary for trading. It can be caused by hardware or software problems leading to delays, system crashes, and mispricing of securities.
Yes, NSE (National Stock Exchange) is functional today just like any other day on all days except Sundays and national holidays.
NSE utilizes cutting-edge IT technologies including an ultra-high-speed data backbone capable of sending thousands of transactions per second throughout India’s financial markets. The exchange also has comprehensive risk management systems such as surveillance tools that monitor unusual fluctuations in prices or traded volumes automatically.
NSE operates under regulatory supervision provided by SEBI (Securities & Exchange Board of India), while its capital markets operations are conducted through platforms owned completely by private equity firms with memberships coming from large banks, insurance companies & investment corporations from across India.
Conclusion
The NSE India technical glitch on 10th July highlights the importance of monitoring how the exchange handles such issues in the future. Traders and investors need to be aware of the potential risks and losses associated with technical glitches, and the exchange needs to ensure that its systems are robust enough to handle high volumes of trades without any interruptions.
