Leading stock exchange BSE has decided to discontinue Stop Loss Market (SL-M) orders from October 9 to prevent erroneous order placement arising out of manual or algo trades.
This came after a recent freak trade incident caused a lot of angst among the trading community earlier this month due to an SL-M order.
SL-M is a type of order that automatically sells or buys a security at the market price when the trigger price is reached.
“As a measure to prevent erroneous order placement, stop loss orders with market condition in equity segment, equity derivatives segment, currency derivatives segment, and commodity derivatives segment shall be discontinued by the exchange with effect from October 9,” BSE said in a notice.
Welcoming the decision, Narendra Solanki, Head, Fundamental Research – Investment Services, Anand Rathi Shares and Stock Brokers, said it is a good step to prevent erroneous orders and should prove beneficial to small and retail traders as such freak trades harm and cre
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