Freak trade in Nifty futures at 5996; fat finger likely

It is a second time in two weeks that we have seen a freak trade. Last time it was in Options on the expiry day and today it’s on the Nifty Futures. In the intraday chart of the Nifty, all of a sudden it zoomed past its important resistance mark. It looks like a fat finger error instead of 5,896, the quote has been 5,996, reports CNBC-TV18's Anuj Singhal.

It is not a small quantity; it is a 16,000 lot; a lot for the Nifty is 50 units so that’s 8 lakh Nifty. It is a profit of about Rs 8 crore for someone who is benefited and almost equal loss for someone who would have erred on the side of wrong trade.
There is price band in futures and options. For Nifty, this is just 2 percent so that wouldn’t have triggered any kind of price band even if it was for a momentary trade halt. This is a pure case of fat finger error. I do not think there is any provision to annul this trade because two parties would have entertained this trade at a particular price and someone would have made big losses and someone would have made big gains.
_PAGEBREAK_ VK Sharma, HDFC Securities on freak trade Q: How would you read this freak trade second time just in last 10 days or so?
A: It could be one of those reasons where some kind of a stop loss could have been hit by someone. One should not read too much into this.
However, if we were to take a cue that the markets were up this morning, despite the US markets having gone down yesterday on the shutdown - probably markets are taking a view that as far as India is concerned the tapering is off and therefore it could auger well for India.
The market could also be taking some solace from the fact that the last three shutdowns have been averaged around just three days in the US, so at least our markets are better placed. Q: Do you think it is a case of stop loss being triggered as you pointed out and not maybe a fat finger case?
A: It could have been result of maybe that the 5900 is triggered then the trade should happen at this particular rate, only the National Stock Exchange (NSE) would know, but it could be one of those reasons also. Q: Don't you think that this has violated any of the systemic issues or any systemic issues have been raised, because we have seen just two cases in which the first one was in Options and this one in Futures being done at a significant premium to the current price?
A: I think the systemic issues will be better answered by NSE itself. This is not a small trade, so essentially the exchange will have to clarify on this whether anything has happened or to that extent.