In the early morning of October 31, Zerodha users encountered yet another technical glitch on the platform. Many users faced issues related to order placement, with orders not being executed and other problems, such as orders not exiting.
Technical glitches in trading platforms of brokerages have become a subject of hot debate recently. These technical outages raise a grey area about who is responsible for losses caused to traders by volatile events in the backend of brokerages
Frustrated traders turned to X platform to voice their complaints, with tweets like "Where is my trade? It's executed but not showing in my position" and "My Zerodha order positions are not appearing."
Another user tweet held Zerodha accountable for the losses, stating, "Because of Zerodha's server issue, my positions haven't been visible for 10 minutes, causing me losses. Your team claims they can't do anything about it. Is it not your responsibility?"
Management response
Zerodha addressed the issue, stating that the platform had faced a technical issue resulting in disruptions in position displays on the NSE, BSE, and MCX exchanges. This problem, commencing at 9:00 AM, led to intermittent difficulties in viewing positions on the platform. Zerodha's official statement acknowledged the intermittent display problem, highlighting, "the impact was on the display of positions intermittently. But, the affected positions were displayed to clients post multiple refreshes. The order status was displayed on the orders page correctly for all users. The order placement, order modification and order cancellation were not impacted." Zerodha also mentioned that the Root Cause Analysis (RCA) for the issue is still pending.
Notably, Zerodha came into the spotlight recently when Vijay, a trader, won a case against the platform due to losses he incurred in July because of a technical glitch. He also highlighted the lengthy process he had to go through to claim a refund. This incident is another example of the Indian discount brokerage firm facing backlash from users due to app glitches resulting in trader losses.
Zerodha, according to the BSE’s Grievance Redressal Committee (GRC) order, said that it has taken a leased line of 4 Mbps, that is, the minimum bandwidth supplied by the exchange. The GRC claimed that exchange officials had sent alerts to Zerodha when the bandwidth breached 70 percent utilisation, and despite this, the broker did not take any steps to prevent the outage. Venu Madhav, Chief Operations Officer at Zerodha, claimed the BSE never sent the alert on the breach of 70 percent of bandwidth utilisation. He said the GRC’s observation was a “blatant mistake”.
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