I understand how Price Bands for FNO scrips get changed dynamically;
However, if someone can please explain to me how trading continues in such scrip even beyond that PB while my orders for prices beyond that PB get rejected in Kite (even if the LTP is beyond that PB!); the orders get through only after some time has elapsed?
Have missed quite many opportunities due to this.
Hey @deepbisht,
Stocks which have F&O contracts don’t have price bands, only operating ranges to prevent erroneous/non genuine order entry.
Once the LTP is at the circuit limit, the operating range extended. Until then your orders outside the operating range will be rejected.
For F&O contracts Dynamic price bands are relaxed (only event of a market trend in either direction) in the following scenarios -
If the dynamic price band of the underlying security has been relaxed OR
If the dynamic price band for the same contract is relaxed by another Exchange OR
If the last trade in the contract occurs at 9.90% and more of the base price AND that a minimum of 25 trades must be executed with multiple UCC (unique client codes) on both sides of the trade at or above 9.90% or more of the base price (1 minute average on a rolling bases) and in further multiples of 5% of the price movement.
Until and unless the price bands are relaxed all orders placed upto the point of relaxation with prices outside will be rejected.
@Kshiteesh_Saralaya
Appreciate your effort to explain; however, my question is a bit different and let me clarify more on that…
Firstly, I’m talking about equity trades in scrips that trade in FNO segment and not F/O contracts per se.
Now, my question may be more clear by this very crude example:
Lets say XYZ stock is currently trading at 100 and the upper PB currently is 105. Now, I understand that if I try to place order to buy/sell at, say, 107 then it will be rejected, and only when the UPB gets extended beyond 107, my order will go through.
What I’m talking about is the case (that does not happen always but sometimes for sure) is that even when the LTP would become, say, 108, my same order for buy/sell at 107 will still get rejected for the same reason! Now, if LTP is 108, and trades are happening in that scrip, that should mean that UPB has been extended by the exchange and my order should also go through, but it doesn’t. This is what I’m not clear about. Is it that other brokers have allowed the orders before Zerodha or something like that?
Again, most of the times this is not the case, but sometimes I have faced this issue.
Hope my query is clear now.
I also discovered from nse website that In the event of a market trend in either direction, the dynamic price bands may be relaxed during the day in co-ordination with other Exchange.
This leaves a lot of space in the hands of exchange for manipulation
Indian stock exchanges are there to facilitate the trades and act according to the rules laid down by SEBI. Exchanges work with SEBI to stop the manipulation of the market.
yet, there are subjective decisions in the hands of exchange and a manipulation can’t be ruled out… it is better to be skeptic rather than the a blind believer.
Remember NSE co-location scam?
There are always loopholes in the system 