BSE to discontinue stop loss orders with market conditions from October 9, 2023, to enhance trading reliability. Read More>>
The exchange takes this step to prevent wild fluctuations in options premiums, enhancing market stability.
The recent price surge incident in the Sensex call option highlights the need for change due to Stop Loss Market Order (SL-M) impact.
Traders incurred losses as the premium soared from Rs 4-5 to Rs 209 due to a market order, prompting the exchange's action.
BSE issued an advisory on September 15, urging caution and the use of protective trading system features to prevent errors.
Stop-loss orders protect investors by automatically selling securities if prices fall to a specified level, mitigating potential losses.
Source: Economic Times