Future and options traders using Zerodha, one of the largest online-brokerage firms, faced technical issues between 10 am and 10.40 am on 29 August.
Soon after, the retail broker tweeted about it.
We're experiencing difficulties placing orders with our OMS. We're investigating the issue.— Zerodha (@zerodhaonline) August 29, 2019
The glitch led to users unable to place any trades on the day of expiry, which led to them facing mark-to-market losses. Many took to Twitter to express their displeasure and tweets with the company hashtags were trending. One user asked for penalizing the company.
#zerodha facing problem on order execution... pic.twitter.com/v8VcYWWk1wRelated stories
— SRS (@smp1611) August 29, 2019
#zerodha time to change. Every Thursday expiry there is problem. Is it problem or another zero making machine. @NSEIndia @BSEIndia. Penalise this broker. @zerodhaonline @Nithin0dha— Sandeep Sutar (@SandeepSutar7) August 29, 2019
People were sharing screenshots of their mark-to-market (MTM) losses and were holding the broker responsible for compensation. But client contracts, based on SEBI model agreement, might exempt the company from any such liability.
#zerodha
In general, financial theory investment risks classified as Systematic & Unsystematic risk.
Zerodha a/c holders know another kind of risk called Zerodha Tech Glitch Risk & it happens repeatedly on Expiry & Event days.@SEBI_India @NSEIndia @zerodhaonline @FinMinIndia— Chethan Reddy (@chethan16191) August 29, 2019
This was what happened for me also, #zerodha. Placing an order is taking too much time. https://t.co/0i3ucGvNqu— Ranjith Rana (@RanjithRana) August 29, 2019
The founder was quick respond to the daily that "Nobody can guarantee a 100 percent up time…"
The overload on their order management system (OMS) was pointed out in a post by the company apologizing and explaining that there was no way to predict or control large single orders that caused the overload. To combat the issue they also limited the maximum allowed quantity per order to 20,000 for equity trades.
Post-mortem of technical issue today —
The issue today was that a single order for 10 lakh shares executed in almost 1+ lakh individual trades, causing the OMS to overload. We are extremely sorry for this. More here: https://t.co/4IL5w6qmCD— Zerodha (@zerodhaonline) August 29, 2019
Some investors also suggested the company to increase their brokerage to deploy better technology. To which the founder has assured that technology and quality of their products are something that they never compromise on.
Nithin Kamat has also stated in the post that the online broker will now launch basket orders on their online trading platform, Kite, to ensure that technical issues do not arise because of large orders.
This is not the first time such an issue has risen with the broker. On 27 February, OMS had faced a technical glitch leaving investors miffed. But according to a report by Mint, the broker is not liable to compensate investors who couldn’t take a position online due to a system failure.
Reports suggest that Zerodha had 9.09 lakh active clients as of July 2019 end which makes it the largest retail broker.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
