NSE to take steps to curb fat-finger trades, unusual price movements in options

The National Stock Exchange of India plans to introduce a four-step confirmation process for trading in options in a bid to curb abnormal price movements in derivatives.

The four-step system has already been implemented for futures contracts. Alerts are generated if the order price exceeds or is equal to a certain percentage of the reference price for buy orders and is less than or equal to that threshold for sell orders. The threshold value is 3 percent for index futures and 5 percent for stock futures.

According to moneycontrol, The exchange is shortly introducing a similar alert system for options, The exchange has directed its members using customised front-end systems to build similar alerts.