Freak Trading

Occurs when there is misquoting of Price or volume

while executing the order.

Leads to large buy/ sell orders due to which there is

huge upward/downward movement in prices.

Mostly occurs due to manmade errors, however

sometimes a wrong algorithm may also lead to freak trade.

First Indian Flash Crash-June 1,2010

Human error by a brokerage firm leading to first Indian

market crash. It was an order entry error by trader, who mistakenly sold 62000 RIL stocks instead of ICICI Bank stocks. Reliance industries fell from 1045 to 840 pts.(approx.20% fall) Sensex also plunged 630 points (approx. 5%) from the levels of 16943 to as low as 16318 points. Reported incidence led to certain preventive measures by SEBI but were not enough.

Flash Crash in Future Market

On 20th April 2012, Infy Futures prices plunged 20% due
to another manmade mistake.

Nifty Futures fell sharply from 5338 to 5000, was a drop

of approx. 7% within few seconds. during this short duration.

Around 35000 lots of worth 17.5 lakh shares were traded

SEBIs investigation discovered that human error in
punching price/volume of Infosys shares led to plunge in INFY futures and hence NIFTY Futures.