Freak trading Research Paper

FREAK TREADING: CHALLENGES AND PREVENTIVE MEASURES

FREAK TREADING: CHALLENGES
AND PREVENTIVE MEASURES

Dr Kunal Pandya Dr Snehal Mistry

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ABSTRACT:

The Capital Market segment, National stock exchange and Bombay stock exchange are
two of the world’s biggest exchanges which are controlled and restricted by “Securities and
Exchange Board of India.” Even though having various rules, regulations & controlling
measures, Cash segment of the national stock exchange has shown sudden spike in prices-
Freak Trading, have wiped off 16% of nifty in two minutes with the reduction of 10 lakh crore
rupees of market capitalization of investors, reducing the confidence of investors and agents in
the market and making many investors exit from the investment market. By the words of Richard
Bentley, vice president of Progress Software: “Lack of test undoubtedly was the root cause of
many recent mishaps.” Market has shown 900 points drop which failed to forcing the exchange
to temporarily shut down operations. To prevent future mishap’s SEBI is undertaking various
preventive measures where they are paying more attention to “What if” situations rather than
taking system as granted. “Abnormal orders resulting in multiple trade of low prices are
restricted through equal importance to institutional investor with certain daily limit of the
execution of the order and gathering quarterly compliance reports by which SEBI is hoping to
restrict the malpractices of the exchanges and regaining the investors’ confidence to boost the
current capital market scenario and to generate vibrant practices of the current capital market.

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Contents
ABSTRACT:..............................................................................................................................2
Contents..................................................................................................................................3
INTRODUCTION:......................................................................................................................4
LITRATURE REVIEW:................................................................................................................5
INTRODUCTION OF THE FREAK TRADE:....................................................................................7
BACK GROUND INFORMATION OF FREAK TRADING IN INDIA:.................................................9
CONCERN OF SECURITY AND EXCHANGE BOARD FOR FREAK TRADE:.....................................19
PREVENTIVE MEASURES BY SEBI:...........................................................................................21
BIBLIOGRAPHY:.....................................................................................................................25

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INTRODUCTION:
Indian stock market got converted into computerized system since 1991 to prevent the
various scams like Harshad Mehta scam & Ketan Parekh scam. Even though the computerized
system of trading and transaction was innovated with the motive to smoothen the transactions
and restrict the malpractices of the share markets, the system which was created to restrict itself
becomes the system of malpractices. After the introduction of new system, the system came with
such loopholes which created disaster to the market of India. Among those disastrous practises,
one is known as freak trading.

Since 1991, freak trading was a common issue prevailing into current market but year
2010 was the year where for first time freak trading came out in picture. Rounds of trading
turned out to be freak trading, which never attracted attention of SEBI, brokers, investors and
normal people. But the freak trade by Emkay Global Securities Limited gathered the eyes of
everyone on the same issue keenly. Emkay Global has created the disaster in market where just
by one company and in 2 minute, market capital was reduced by 3 lakh crore rupees. On 5 th of
October 2012 the market has shown reduction of around 900 points in cash segment of S & P
NIFTY which is the benchmark of National Stock Exchange of India.

Emkay Global issue was a precautionary signal for the market, SEBI and brokers of
various cities of the country. Trading which can reduce various people’s market capitalization
just because of the mistake by one simple trader of trade union had forced SEBI to measure the
restrictive policies to prevent this kind of mishaps. SEBI (Security & Exchange Board of India)
came out with various steps which includes restriction of trade has undergone with various
changes to make market trade movements very smooth.

Though, SEBI has undertaken various preventive measures to restrict various scams and
freak trading malpractices of the security market and capital market, the measures and system
itself failed very bad that the system needed reconsideration and alteration to restrict this kind of
malpractices.

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Though freak trading is a minor issue in capital market, and that too with the preventive
measures been undertaken, the major concern for SEBI become to rectify the system itself to
restrict further issues like freak trading.

LITRATURE REVIEW:

1. According to “Palak Shah” titled: Freak trade at NSE: Rs 3 lakh cr erased

in 2 minutes:-

On 5th October 2012 at 9:49am, in the NSE there was a decline at 900 point with
reduction of around 3 Lakh crore rupees of market capitalization. Emkay Global Financial
Services issued trade of 59 stocks in shares like State Bank of India, ITC where mistakenly 65
crore cash sell was issued at 650 cr which ultimately reduces NIFTY by 16% requiring to halt &
trigger trade to halt by 1 hour as per rule instead, the trigger was for 15 minute only. According
to SEBI, the mistake was made by Emkay Global which traded in cash market and part payment
has been paid. But due to this mistake, market capitalization of Emkay Global reduces from 70
crore to almost loss of 50%.

2. Santosh Nair: Freak trade to cost Emkay Rs 51 crore; in talks with

brokers:-

According to Santosh Nair on 5th October, one of the broker has mistakenly sold 65 crore
Rs shares value of 650 cr rupees where they come to oversold position triggering price to go way
below (almost 15 to 20%) in some selective shares which ultimately had given opportunity for
buyers to buy shares at very low price. To rectify these mistakes, Emkay also needed to buy 650
crore rupees of shares from market. It has suffered loss of around 51 cr rupees which has passed
to many small brokers of the country. The ANMI (Association of National Exchange of India)
and BSE brokers forum is requesting to brokers to participate in reducing loss of Emkay Global.
SEBI has taken this manipulation seriously and started making various regulations against the
stock brokers.

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3. Reuters: Freak Trade again? NSE probes decline in Tata Motors,

Ultratech:-

On 2nd Feb 2013, NSE has seen freak trade again on Tata Motors and Ultratech cement
where one broker company has placed sell order way below than the trading price prevailing in
the current market situation which has shown almost 10% decline in shares prices. According to
SEBI, although the trading was within the limit of stock exchange & SEBI rules. Although SEBI
confirms it is a freak trade where one broker has misplaced the order with lower price. It also
seems that in large cap market bid - ask spread was abandoned, though this kind of malpractices
are performing in the market.

4. Reuters Market Eye – Shares in Bank of India make a sharp fall before

quickly recovering in what some traders describe as a “freak trade”:-

On 5TH Feb 2013, the Bank of India shares shown a reduction of rupees 22.65 with the
denomination of 336.65 rupees which is a down of 7.8%. Around at 12:20pm IST, this kind of
reduction happened at the National Stock Exchange which ultimately described as a freak trading
where most of major blue chip shares like Tata Motors, Ultratech cement have also shown as
much as 10% reduction, which was actually the cause of technology glitch at Religare Capitals.

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INTRODUCTION OF THE FREAK TRADE:

Since inception, national stock exchange and Bombay stock exchange has seen immune
growth with the number of companies and market share also. Most people and traders are
entering in the NSE and BSE which consist of around 99% of the total investment and activities
in countries stock exchanges. Among all NSE and BSE are known as most sophisticated and
most structured stock markets in world. In the year 1992 when government of India amended the
Act known as Security and Exchange act, 1992 that moment the stock market converted its
physical based trading to Screen based treading and this immense change increased the
investment base in the market only.

Even though SEBI act 1992 was introduced to smoothen the process of the market
movement with the security and safety of the investor, still in certain ways there become various
issues and scams in the capital market in larger cases. Whether we takes example of Harshad
Mehta or Ketan Parekh, in all cases man made mistakes or manmade blunders created scams and
created reduction of investors capital and investors trust in to capital market. Among all of this
various scams happened in the various stock markets, the most recent scams which have created
major issue for the stock market and Security and Exchange Board of India is the Freak Trading.

Freak Treading by its name shows that this is the treading which creates a freak in the
market. By large the definition of freak trade is: “freak treading is a treading in either Buy or sell
in the cash market segment of the stocks where the price or the quantity of the stock was quoted
wrongly by manmade mistake which creates huge reductions in the prices of the that particular
share or the market benchmark.” Trading which includes the wrong price of at the time of
purchase or sell in particular intraday transection or the treading in which either buy or sell
quantity were of so large amount which ultimate increases or decreases the price of the product
so large creating the Freak in the market for the upward or downward movement of the price and
this is why this treading is known as the freak treading.

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The hype of freak trade came in to existence on 5 th October 2012 where just because of
the manmade mistake of one broker market has shown 16% reduction in the market. The
benchmark share NIFTY has shown tremendous reduction of 3 lakh crore of rupees in the market
capitalization of the share. The market was halted for 15 minute for trading purpose. One broker
has mistakenly orders of 650 cr rupees instead of 65 cr rupees which have created an impact of
decline in major blue-chip stocks of Indian market. It becomes necessary for us to understand the
History and issues related to impacts of freak trade.

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BACK GROUND INFORMATION OF FREAK TRADING IN
INDIA:
 June 1 2010:

June was the date where for the first time Indian market seen the freak treading. During
the trading session of the 1st June, shares of reliance falls almost 20% from the previous day’s
closing of the Sensex. Previous day closing for the stock reliance industries was 1045 and as per
the below data the we can see that the day closing of the stock shows about 840.55 which is
almost about 204.45 point of reduction which is almost 20% of the market.

Even in the below picture of the Sensex we can see that the Sensex for the first June
started with 16943 and the day low was 16318 which had shown the reduction of around 630
points. The most surprising thing was that even though the market was running smoothly on 1 st
June 2010 through just a manmade mistake by some of the broking company in the blue chip
company reliance industry had shown the reduction of the shares price of 20% while it reduces
the Sensex by almost 5% and reduced the market at very large position with reduction of market
capitalization of various investors. This incidence kept the attention of SEBI at large as it has

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created a freak in the market and thus this kind of treading got name of Freak Treading.

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The reported incidence had seen certain policy formation and certain preventive measures
by the SEBI at large and had made foundation methods to track down the freak trading in the
stock markets of the India. By large these preventive measures were the transformation of
Infrastructure only which at large created some room for the development of the manmade
blunders which can create huge problems for the investors of the Market.

• 20 April 2012:

There were huge and abnormal activities been performed on 20 th April 2012, Where the
nifty future fall sharply from 5338 to 5000 which was a drop of around 7% with in very few
seconds but later on it recovered and settled to around 5300. Surprising things were that till this
duration around 35000 lots worth of 17.5 lakh shares were been traded in the future market.

The situation in nifty future occurs just because of the manmade mistake where the
person can mistakenly punched or enter a sell order with a wrong quantity price or it is also
possible that it may be due to the algorithmic treading where it is a program treading which in

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case there is a fall below a particular price level, the algo will initiate the sales no matter of what
the price is.

The basic idea of the situation can be stimulated that on the same day there was a deep
price movement of Infosys shares which has shown the reduction of around 20%. By the
investigation of the SEBI it came out with the theory that any manmade mistake to the Infosys
share could have plugged either lower prices or more quantities. This would have reduced the
market price of the INFY future which might have reduced the Nifty future by this large amount
also. This kind of treading was known as Flash Crash in the future market.

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• 5th October 2012:

5th October is the worst day in the history of the National stock exchange and also in the
history of the freak treading where the marker totally lost 3 lakh crore rupees of market
capitalization and that also to the reason of one freak trade.

On the same day, one broker named Emkay Global financial services, trading for a sell
order on an institutional investor for Rs. 65 crore of rupees mistakenly quoted the order of 650 cr
rupees creating a hype of the down ward trend of the prices in various blue chip companies of the
National Stock Exchange. Emkay global has mistakenly traded in 59 trades at same time for
placing 650 cr rupees of shares sold at very nominal price in the market. The only issue which
arises in the market was the supply of the shares becomes so much than the demand of the shares
which ultimately forced the prices to go much below than the last traded prices in the market.

The same day of this freak trade the national stock exchange benchmark “ S&P NIFTY”
had started its treading with the open price of 5815 which just because of the mistaken trade of
Emkay Global reduced to 4888 point which was the reduction of around 16% than the previous
trade. This reduction of around 16% in the market has washed away the market capitalization by
300000 cr of rupees. Which is almost a huge amount for any of the markets?

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The same day Emkay Global has issued order in various blue chip companies of India
who all are having good presence in the stock markets of India and which actually covers the
20% portion of the overall trade and market capitalization of the Indian capital market. Let us
look at the Impact of this freak trade on these shares.

I. Reliance Industries: reliance industries are the most traded security in the
marker with the majority of market capitalization in National Stock Exchange of
India. Due to the Freak trade by Emkay Global on 5 th October, the prices of the
reliance industries which were around 860 rupees reduced to around 683 rupees
which is almost the drop of 180 point representing the drop of almost 20% just
because of the freak treading leaving investors to lose millions of rupees.

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II. Bharati Airtel: Bharati Airtel is the giant company in Indian market who is
having its presence with the telecom and mobile communication system. Bharati
Airtel is one of the leading companies in India who always have shown stable and
sustainable growth in terms of security market. But on the freak treading day,
bharati Airtel which was started its trade from 271 rupees reduced to 215 rupees
showing the difference of around 20% in the share prices of the company.

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III. Hindustan Unilever Limited: The HUL is the most prominent company in the
National stock exchange of India. HUL is a subsidiary company of Unilever
limited which is a multinational company. HUL itself is the preference for
majority of the stock brokers for the speculative and earning prospective. The
same situation has seen in the freak trade of the Nifty where mistakenly the
market price of the HUL which was 559 reduced to 444 showing almost 110 point
difference and 20% reduction in the prices of the shares.

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IV. ICICI BANK: just like other companies in the market, ICICI bank has shown the
crash in the prices two which is as below.

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Emkay Global has realized this manmade mistake so early in the duration of few minutes
only but still the market has reacted so suddenly that majority of the trades gets executed and
converted to sold shares. The outcome of the freak trade was many of the dealers who have
quoted very low price for the particular shares got the order executed and the amount paid for
these shares were so low that these investors have made around 20% of the profits just by the
mistakes of some other Broking House.

Emkay global itself is a registered company in the stock market which does have a net
worth of around 148 cr rupees and a market price at that moment was around 32 rupees of a
share. Just because of this freak trading in the market Emkay Global needed to pay the cash
reserves of the particular Trades which were already converted in the small duration of this
system. Apart from that the Emkay global also needed to pay penalty to the Security and
Exchange board of India for this mishap. The total loss to this company for this manmade
mistake was around 60 cr rupees which is almost 50% of its net worth.

The impact of this issue was so huge that the benchmark share of National stock
Exchange of India S&P NIFTY was been halt for treading for 15 minutes. This trigger was

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generated by SEBI to analyses the situation and to recover the data of the shares. Just 2 minutes
of manmade mistake has washed lacks of crore rupees from the market which ultimately shows
the failure of the market.

 5Th February 2013:

On 5th February 2013, nifty has shown the sudden drop of around 10% prices in the
shares of Bank of India, Tata Motors and Ultratech Cement. The Security and Exchange board of
India has started the investigation and came out with the solution that the broking firm Religare
has mistakenly issued the order of shares which has lowered the prices of the shares. The
officials of the religare have issued a press note stating that the company is utilizing the third
party software to trade in the stock markets. The system has shown some errors which have
created false orders. The fault was the only system where the system has mistakenly placed the
freak order which has rectified so soon. The reduction in the price was within the limits of the
Nifty.

CONCERN OF SECURITY AND EXCHANGE BOARD FOR FREAK
TRADE:

Majority of the trades in the stock exchanges are within the regulatory frameworks of
Security and Exchange board of India’s rules and regulation. In the cases of scams and Freak
trades, SEBI plays role of investigator and restrictor for further issues in the market. In the case
of Freak treading in India, SEBI has started the investigation in the market system, where they
came out with the investigation that the problem of the freak trading was just a manmade mistake
nothing else. The issue was conversion of the manmade mistake in providing the market orders
which ultimately created the issues of Freak Trading.

Regulatory frame work stated by NSE senior VP Ravi Varanasi quoted that the market
has seen the freak trading but the system was not the issue for freak trade and that’s why the
market has not halted its transection for more time. The markets at the times of Freak trades were

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just halt for less than 15 minute period only. He quoted that: “There was no technical glitch. It
was a normal market order.” He clarified a large order was placed erroneously and trading was
not halted for a longer duration, as required under the norms, because the entire market could not
be made to suffer”. The VP of NSE stated in his quote about the technical glitch in which he has
culprit the company for the fault and just because of a manmade mistake the market does not get
triggered and cultivated its regular transections in the remaining duration of the functions.

All the senior officers of SEBI are just targeting the company for all the faults happened
for the Freak trade but none of the officials have ever put their attention on the overall
functionality of the market infrastructure which is at ease a lot. The major concern for any of the
stock exchange is the possible infrastructure failure which can create a huge danger for any of
the investor in the market. Thus any of the regulatory body never conveys the mistakes of the
Infrastructure of the stock market and regulatory functions of the particular body.

In the freak trade case in NIFTY, the major concern which arises is the failure of the
mechanism of the stock exchange regulatory system. In Indian stock exchange the stock markets
fallows the trigger mechanism where if the share or benchmark share prices increases or
decreases to certain amount in terms of percentage than the market triggers and stops the
treading section for certain period of time.

Rules say trading should be halted for an hour if there is a fall of 10 per cent in the Nifty
or Sensex before 1.00 pm and for 30 minutes if the limit is breached between 1 pm and 2:30 pm.
These norms are similar if indices rise/fall by 15 per cent and 20 per cent. These rules are
preventive measures for any freak in the markets for the investors. If market moves above 10%
trigger than the market steps its movement for one hour which has to be happened at the times of
freak trade where the prices of the particular share as well as benchmark share has reduced by
16% to 20%. The mechanism should have stopped the treading in the market for any further
reduction in the market prices but in none of the cases of freak trading this kind of trigger
mechanism worked.

The only reason to this system mistake can be justified that whenever the freak trading
happen in the market, all the trades were manmade mistakes which have been rectified with in
the few minutes of the transaction. It means that even I the mistakes are happening which

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ultimately been rectified by the cancelation of the same order with in few minutes which
ultimately bring the market prices back to the same movement. The market security forces states
any changes in the market price above trigger prices only if the trade was stated for few minutes,
but in this cases the movement was stopped and canceled which makes the market mechanism
faulty for the systems of freak trading.

Looking at the mistakes of man and a system, showing the consequences of SEBI for
preventive measure, it becomes necessary for us to look at the various preventive measures
undertaken by SEBI for the prevention of Freak Trade.

PREVENTIVE MEASURES BY SEBI:

Security and Exchange Board of India, who has introduced mechanism in the year 2000,
has not changed single methodology since it. The system setup in 2000 was so rigid and
unstructured which has cultivated various ways of scams and scandals. SEBI chairman, after the
freak trade on October 2012, stated in one report that they are not at all in hurry to investigate
about the case because they want to be very cautious in whatever new structure they have placed.
SEBI wanted to do wide range of consultations and stress testing of various systems.

By large, SEBI has taken the issue very seriously and is doing various measures to
prevent freak trading, some of them are as below:-

 Suspension of Emkay Global’s trading license: -

On 5th October 2012 one of the broker has mistakenly traded a block deal of 59 trades
costing 65 crore of sale. The trade was mistakenly placed to 650 crore rupees which ultimately
was rectified by the brokerage firm, still it created freak in the National Stock Exchange for 2
minutes which ultimately suspended the trade for 15 minutes.

SEBI has undertaken this mistake of Emkay Global very seriously. The company was
started by too chartered accountants with the view of trading and brokerage of stock exchanges.
This company is a listed company in the stock exchange with a market capitalization of Rs 75

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crore and net worth around 140 crore rupees. The company was having high liquidity in terms of
cash to trade in the market aspect.

Even though the company was having enough liquidity position, SEBI has suspended the
trading license of Emkay Global. The company had paid all the penalties to the SEBI, still the
license was suspended.

SEBI chairman Upendra Kumar Sinha stated that, cancelling the license of Emkay Global
is a decision of SEBI to provide strict impression in the market for the companies who are
creating hype and freak in the market. Suspension of the trading was a historical example by the
SEBI to all the broking companies for a preventive measure.

Emkay Global was a huge company who participated for major terms of trading in NSE
cash segment. Even though after paying penalties, the company’s license of trading was
suspended. It really shows that how serious SEBI is to prevent this kind of freak trades in the
country. The broad steps taken by SEBI provided red signal for all the broking companies stating
to comply with rules and regulations of SEBI for smooth trading of the markets.

 Imposing cash margins on institutional trades: -

Stock market transaction does convey two methods. One method is cash method and
second method is margin method. In terms of cash method, generally the buyer needs to pay the
full amount. In margin method buyers put margin only and rest of the amount is paid in later
stages.

The basic preventive step SEBI took is impose of the cash margins on the institutional
trades. Generally whenever the institutions are participating in cash segment market of the
various stock exchanges, that time they make either short buy or short sell, where they just need
to pay small portion of the amount and rest amount will be paid at later time.

When institutional trades are doing trade, if that moment they need to create some margin
payment by cash, that moment will restrict them to convert major trades because of cash
restriction or liquidity restrictions. Major of the trader’s trade for clients where client insist to
make margin calls. Whenever this kind of margin calls occurs in market, each and every trader
should deposit some cash margins for the trade.
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In recent situations, where we are transferring to T+2 trading cycle, imposing cash
margins for institutional investors will help the SEBI and market to work safely without any
scams. The cash margin imposed to the institutional investors will restrict the freak trade by
large. After imposing these cash margins, all the institutional traders need to deposit certain
amount of trade in terms of cash when they are doing any trade transaction in market. Whenever
the trade is within the cash margin limit, it will ultimately been executed but if the cash margin is
below the required margin that moment the transaction will not be executed which will restrict
the order.

The preventive measure will help in large to restrict the freak trades in NSE & BSE.
Whenever any transaction occurs in market which we called freak trade will first need cash
margins to execute the order. Once the company doesn’t provide cash margin, ultimately the
trade gets suspended and the market panic will not occur just by any manmade mistakes. Thus it
provides very feasible solutions for the freak trade, which SEBI has planned to perform.

 Setting up risk and surveillance infrastructure: -

Security and exchange board of India is always looking to simplify and clarify the trading
mechanism of the markets. In the process of simplification of the trading terminals and traders,
SEBI introduced various infrastructures to traders. One of the major transformations is the
introduction of computerized trading system in Indian markets.

Apart from that, Security and Exchange Board of India has started various yearly
compliance report submitted by the brokers and traders of the NSE & BSE. These compliance
reports must need to provide the liquidity positions, trader situations and compliance with the
customers are necessary. Apart from that traders also need to provide various basic information
about trading which occurred and conducted by traders during the specific period of time.

Initially, the SEBI wanted to conduct this risk surveillance every year but later on due to
misconception scams and manmade blunders, SEBI started conducting these reports quarterly
where each trader are in the need to provide risk report every quarter and depending on that basis
their trading license will be renewed.

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In the transformation of infrastructure, SEBI is trying to improve the trading cycles where
they want to convert the cycle from T+2 T days. They are also planning to reduce the 15 second
delay which actually prevails in the current security market which shows the changes of price.
These changes are causing many orders to over value and under value then the actual order.
Thus, a step of SEBI for the surveillance of risk and infrastructure is a very broad step.

 Imposing small momentum circuit for small duration: -

Since the computerization of the securities exchanges of our country, SEBI has imposed
certain limitations and restrictions to prevent massive scams and obligations in stock exchanges
of our country. SEBI has measured various limits till what the movement in one direction can
sustain. The limit is imposed to restrict the upward or downward movement of the prices of
shares and scripts up to certain limits only. If the limit was not imposed then ultimately, the
stock transaction in particular shares can be seen as manipulated shares and ultimately creates
scams. To restrict this either upward or downward unlimited manipulation, circuit system has
been imposed in the stock market of our country.

SEBI has introduced various stock market circuits for the different levels of prices. SEBI
has divided the restrictions of the trading for certain time (circuit) for different percentages. If
any stock price or market movement crosses 10% than market trading stops for half hour. Later
if it increase more 5% then trading stops for one hour and if it again increases 5% then market
stops trading for half day only. In case of freak trading, where market reduces by 900 which
comprises of 16% reduction in market price of S & P NIFTY needed to be closed down
automatically for one hour but the system didn’t trigger and market had not stopped it’s trading.

Just to rectify this kind of system mistake, SEBI want to implement one strategy and
restrictive measure where they are targeting of 2% movement of the script or share within two
minute time duration. Means if any share or script shows 2% up down in price movement, then
script should ultimately suspend the transaction in that share or script for few time only. Putting
2% trigger in 2 minute will ultimately restrict majority of the freak trading in the market. It also
prevents massive loss in the market capitalization due to various scams and freak trades in the
market.

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SEBI is under the surveillance of this preventive measure and hopefully these restrictive
practices will be implemented soon in stock exchanges.

 Transformation in Infrastructure: -

In 1992 Security and Exchange Board act was passed to control the stock market
movements of the country. SEBI came out with screen based trading system which made trading
so secure and easy. In screen based trading system, majority of the shared needed to format in
dematerialized format. In the transformation, majority of the brokers and investors needed to
transfer to online trading system which ultimately provided faster delivery and transaction in
stock market.

To prevent freak trading in stock market, SEBI is coming out with the issue of one
password to each trader which ultimately reduces the various trades by single password creating
restrictions of freak trade in the market. By providing single password to the trader the mistake
can be traced easily and restrictive measures can easily been taken. Thus this transformation of
better infrastructure provides various benefits to prevent freak trading in the country.

BIBLIOGRAPHY:

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 http://www.business-standard.com/article/markets/nifty-dips-15-in-freak-trade-emkay-order-
causes-15-min-disruption-112100500107_1.html

 http://economictimes.indiatimes.com/topic/Freak-trading

 http://www.goodreturns.in/news/2012/10/05/freak-trade-draws-sebi-probe-145127.html

 http://www.firstpost.com/investing/emkay-freak-trade-after-crash-exchanges-want-narrower-
trading-band-482730.html

 http://www.mydigitalfc.com/news/sebi-weighs-pause-option-risk-check-foil-freak-trade-364

 http://www.moneylife.in/article/nse-freak-trade-fiasco-sebi-rules-out-quick-changes-in-error-
trade-annulment-rules/29030.html

 http://www.anirudhsethireport.com/reliance-freak-trade-sab-chalta-hai/

 http://www.livemint.com/Money/72ZCpBiDcvKq75Eu0T8x6J/Trading-on-NSE-halts-reasons-
uncertain-dealers.html

 http://www.firstpost.com/investing/freak-trade-again-nse-probes-decline-in-tata-motors-
ultratech-610903.html

 http://in.reuters.com/article/2013/02/05/bank-of-india-freak-trade-nse-tata-ultra-
idINDEE91405220130205

 http://www.moneycontrol.com/news/market-edge/freak-trade-to-cost-emkay-rs-51-
crtalksbrokers_765857.html

 http://www.business-standard.com/article/markets/freak-trade-at-nse-rs-3-lakh-cr-erased-in-2-
minutes-112100600062_1.html

 http://profit.ndtv.com/news/corporates/article-freak-trade-in-tata-motors-ultratech-shares-
due-to-system-error-religare-capital-317223

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Freak trading Research Paper

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