Zerodha glitch hampers trading on expiry day

Mumbai: Several clients of discount brokerage Zerodha were unable to execute their trades for large part of Thursday, as the broker’s website faced technical glitch.

According to some of the brokerage firm’s clients, the traders were unable to place orders and also faced additional margin blocks. The development assumes significance since Thursday was the expiry for the August series contracts in the futures and options market.

They were unable to square-off their positions in time leading to not just financial losses but were forced to take physical delivery of shares on some trades.

Clients of Zerodha also faced issues while rolling over their existing positions. “Due to margin blocks, when we tried to unwind our existing position, the system was considering it as a fresh order and we were being asked for margins again for the order,” said a Mumbai-based trader who uses the services of Zerodha.

In an official statement on Thursday evening, the Bengaluru-based firm admitted the technical glitch, saying that it was on account of a large order that was placed in a penny stock which overburdened its system.

“It is normal for a large single order to get executed in multiple trades at the exchanges, usually up to several hundred trades. But today, a single order for 10 lakh quantity placed at around 9.40 AM on a sub Rs 1 stock (penny stock) on BSE got executed in almost 1+ lakh individual trades. This is unprecedented and caused an overload,” the statement said.

Zerodha’s order management system is designed by Refinitiv.

The firm has now limited the maximum quantity of trades allowed per order to 20,000 until the issue is completely taken care of. “If a client has to enter or exit larger quantities, it would have to be done in multiple orders of 20,000 quantities. We will soon launch basket orders on to ensure it is not inconvenient to create multiple orders of 20,000 for a particular stock,” Zerodha said.

While the firm claims that the limit on maximum quantity of trades would impact only 0.02% of its clients, traders say any move to introduce restrictions could create further panic among clients.