On last friday (23-Apr-2017) all cover orders were closed at around 3:00 PM instead of around 3:20 PM. What are the reason for that? Was it something specific to the broker (Zerodha) or a mandate by the exchange?
Exchange recognizes only one kind of order (either buying or selling). CO/BO/MIS etc are all just layers built at the broker end. Since there were some issues we faced with BO/CO for 20 mins in the morning we were trying to be doubly sure that there are no squaring off issues.
This means Zerodha or the broker initiates the the orders to close the CO position around 15:20 everyday - am I correct in understanding? Repeating a question from my previous thread - what-if, due to unforeseen circumstance Zerodha infrastructure loses connection with exchange from 15:15-15:30. What happens to those open orders (CO)?
The open SL/Exit orders if not hit will get cancelled end of day. You will end up holding the CO/BO/MIS positions overnight. If it is F&O and you don’t have enough overnight margin, there could be an exchange penalty. If it is equity, it will become like a delivery buy or delivery sell. If you have a short position in equity, that becomes a delivery sell trade which can be an issue.
In case of BO/CO, since orders are already on the exchange, even if we lose connectivity, we can find alternate ways to square off all those positions. (hence we square off all positions at 3.20pm, to get that 10 min leverage). But in case of MIS, since the exit orders are not there on the exchange, if we lose completely connectivity, there will be no way to square off those.
That said, the risk of this happening is extremely thin, especially with multiple fail-overs that we have in place.
Fantastic! It’s one of the most complete and precise answer. Thanks.
As a trader, I never wanted this to happen but something exactly like this happened yesterday. Even though my loss was insignificant this raises a question on risk management and I want to be understand this better.
Are the trader in your platform insured against a black swan incident like this? With leverage & F&O segment this could have huge impact.
Having an IT/Financial background - I sympathize with your team and hope you guys keep up the good work.
@nithin This has become a fortnightly practice. There was an issue with orders on 21st April too and now again on 8th May. Do you think ppl can confidently trade on your platform when incidents when the risk is so high?
Thankgod I hadn’t taken positions on those time. These incidents have made me loose confidence to trade on zerodha.
Would like to know why is that for CO for the F&O - Equity its 10 mins(3.20 PM) before market close but for commodities its 25 mins before. Cann’t it be same as Equity ie 10 min before market close. Its out of curiosity i am asking this question.
I too lost money today due to technical glitch in bracket order…when I contacted the support team the simple said sorry and when I questioned them they shouted at me and disconnected my call …