Is it worth going for arbitration in following scenario against broker for compensation for trading losses of 4.9L?

Trading
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I faced severe losses above 4.9L via trading in SENSEX options when trading using API. I have been trading for more than an year and didn’t face such huge losses. My broker’s API was responding with non-existent sell position while fetching positions via python code. This led to my code repeatedly trying to square off this non-existent position leading to large number of buy side positions that was unnecessary. This led to large number of unnecessary positions which I squared off when it came to my notice. But already 85k positions were created and huge losses were already made.

I had not kept cash balance in my account to take this many number of buy side trades (paid up cash is required for taking buy side positions as per SEBI). Still broker allowed me to take around 85k buy side trades with 2L cash margin and remaining upto 10L pledged collateral margin. I admit my risk management via my api code (in python) could have been better. But technical glitch from broker side showing non-existent positions and also broker allowing more trades than allowed as per margin rules also led to this loss. Can i challenge this loss for any sort of compensation from broker? I already went through Smartodr and Cadreodr platform where reconciliation failed. The next step is arbitration for which i have to pay an initial fees. Is it worth the attempt to chase compensation in this matter?

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how can broker still let all those orders go thru even without full margin? Which broker is this?

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You can try, but it’s going be tough to prove I suppose. Most brokers are dishonest.

In India (and maybe anywhere) you have to monitor the API queries. I keep monitoring from time to time, and have alerts (messages and sound alerts from PC) that notify me when orders are placed, and also regular mesages about when certain order executions may be near.

Also, my algo doesn’t take a trade if there is an unusually large price difference btw successive API calls. I put this routine in after Kotak mistakenly gave me Nifty spot price of previous day instead of current price. This happened 3-4 times in Kotak (that I am aware of), and happened with Zerodha once.

Few brokers in the past allowed Buy orders if theres enough collateral margin.

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@NithinKamath @Meher_Smaran please help with the answer.

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@nithin sir please reply🙏

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Hmm… shouldn’t have happened. I guess you can apply for arbitration and see how it goes.

Btw which broker is it?