The decision comes in light of a recent instance of wide price movement in Sensex call option of 67,000 strike on September 8, on account of Stop Loss Market Order (SL-M) without due price protection. Due to a market order, the premium that was trading at Rs 4-5, shot up to Rs 209 for a few seconds, and a lot of traders faced losses due to this, Jain said
BSE will discontinue stop loss orders with market condition across equity cash and derivatives segment, currency derivatives, and commodity derivatives with effect from October 9.
Such a move has been taken by the exchange as a measure to prevent erroneous order placement, the exchange said in a circular late Thursday.
“It’s a step in the right direction to avoid instances of wild swings in options premium due to freak trades,” said Shrey Jain, founder and CEO, SAS Online.
