Today was bizarre day, in-fact a very stressful day for a lot of traders, including myself. And hence I would want to just share my experience in this particular article, so that, those of you who read it, let’s say one year down the line, two year, three years down the line, at least you will be able to relate to what happens in situations like this, and probably can learn something from this.

So, let’s see what happened? Today NSE had a big technical glitch. A technical glitch basically means that the NSE was not able to accept the orders that the traders were placing. So, you basically cannot buy or sell when NSE is having problems. And the problem with me specifically was that, I was stuck in a bad trade and I spoke to a lot of other traders who were in a much worse situation than I was.

And I could totally understand and relate to the anxiety, the frustration, the fear that they feel. Since traders were stuck in a bad trade and there was no visibility of how and when they will get out of that trade. And what I’ve done is, I thought to put down my experience with this issue happening in real time. So today when I came to the market, my intention was not to be very bullish because the global context was very weak.

The worldwide markets, the US market, the Asian markets, everywhere I saw red on the screen, but I was not intending to make any short positions. I was only looking for trades, which would work out from an expiry perspective. See what happens on expiry is not so much about which direction the market would go. It’s more about the levels. So today my view was to at least hold on to the 35,000 Mark and by taking a short rate on one of the put options, I would be able to eat the premium for that option. Hence I was not necessarily bullish. I was just going to eat the premium as long as the market stayed about the 35,000 level.

So right in the morning I backed up and it gave a very strong indication that it would go up. So, what I did was, I took a long position on Nifty somewhere in the morning itself. And the idea was that the longer I can stay in the position and take benefits of the premium for the day.

I was on the track to complete my trade and book my profits…..So at the point I wanted to square off my position and decided to get out of the position, I got a rude shock because when I decided to get out the market, it stopped all of a sudden. And I was totally surprised as to what was going on. Then I saw a notification from Zerodha, my broking partner, that NSE was facing some technical issues because of which the trading halted on NSE. Though BSE was still going on, but on the NSE, there was some technical glitch. So, I thought that maybe for the next five minutes or so, NSE will be able to figure it out because they have backup servers. And moreover, NSE has all different backup plans and rescue mechanisms in place to counter such situations.

Knowing the facts that the NSE had backup for these situations, I was still getting a little nervous. But I had no other option except to wait. So, I started waiting and waiting and waiting, but I was getting a little bit worried. And the reason I was getting worried was the magnitude of the fall from Nifty was significant and similarly the global markets were also down.

Hence with such a market context and the signal that nifty was giving, it was very much possible that the put option that I had sold, and the moment when the market opens up again, there will be a flood of new orders, and the market will move down with a huge momentum and easily hit my stop loss. And unfortunately, I did not have a stop loss order in my system as I wanted to revise it, but I was not able to place it again. I was worried that if the market opens again and there would be flood of new orders, then I might find myself into some really big losses.

So, let us see what exactly was the problem? Like why was NSE having all these issues? The reason behind the NSE shut down was a technical glitch and the NSE published a statement following this shutdown incident, saying that NSE had multiple Telecom links with two service providers to ensure redundancy. Redundancy basically means that you have a backup, and if let’s say one service provider is down for some technical reason, at least the second service provider will be able to keep the instances live. But NSE had received communication from both the telecom service providers, that there are issues with their links and due to which there is an impact on the NSE system.

In general, the vendors are tested for all such situations all the time and various mock sessions are also conducted on Saturdays to ensure safe and secure working. But in spite of that, both of these telecom providers, had issues at the same time and NSE went down. And to make the situation worse, their timing of the issue was specifically bad. And the reason why this was so bad was because it was the expiry date of the futures and options the very next day. And since it was not the weekly expiry but the monthly expiry model and there was so much money on the line, and because of this people who were stuck in their position started to get desperate.

And because of this desperation, we see some really bizarre moments in the market. And due to this situation, my level of frustration increased as there was no clear communication as to when the issue would get resolved. It was neither highlighted on TV channels, nor any mobile communication was done to show some sign of relief to the retail traders, who were worried and stuck in their positions. There are lot of small traders who work on leverage. And when you are working on a leverage, what happens is that you cannot carry the position to the next day because you don’t have enough capital to support that trade. So, if NSE for some reason would have decided that we will not treat today rather we will open the market tomorrow. Then most of these small traders, who did not have enough capital to carry the trade to the next day. And their brokers would be forced to square off their position. And this was the biggest frustration as there was no visibility, no communication, and no regard shown for the small traders.

Now let’s see about what happened next. NSE said that from 3:30 pm to 3:45 pm there would be a pre-market session, and the market will be opening from 3:45 pm till 5 pm. So, all the traders who were stuck in their trades can get out of their trade. But soon after it opened, we were not able to complete our trade. Neither we were able to place orders nor get out of the trade. This was weird and left traders stuck in their positions not knowing how and what to do next. Then the issue was resolved by Zerodha and we were able to complete our trade. And due to the time that NSE gave for the session, the traders became desperate and market saw a huge volatility, as people were already in trade and even the stocks saw huge volatility. This situation led traders to incur huge losses and many retail investors would have lost money due to this NSE disaster. Many small, big traders lost money….but who is responsible for this loss?

Who is to be blamed for this loss? Who is to be contacted to claim the money back? These questions are flooding in to the mind, but to our despair it cannot be recovered… Money lost is lost. We as a trader do not realize that when we open a trading account with a broker, we have to fill out a disclaimer. And the disclaimer is not just with the broker, but also with the stock exchange that they are not responsible for any technological risk as what we saw in this discussion.

Hence any losses that the trader incurs because of a technological issue, the stock exchange is not responsible for that and definitely it is not the responsibility of the broker either. And thus, who so ever incurred the loss in such a situation, have to basically accept it and move on. They don’t have any way of recovering those losses from the exchanges.

We are left with only one option to accept it the way it is. As, this is not the first time, that this is happening with NSE, as similar kind of incident happened in 2017 also where NSE took three hours, four attempts to restart the trading after the glitch. There has been no accountability and responsibility taken by the NSE for such glitches and technical faults, and just said “we will investigate”.

People lost a lot of money that time, and people lost a lot of money today as well. This is rather unfortunate, but on a bigger scale of things, we are not alone. As its not only NSE is the only exchange in the world where these kinds of problems have happened, but we had seen similar kind of incidents on the London Stock Exchange in 2019, where it was down for nine hours. Similarly, we had the Tokyo Stock Exchange down for one complete day. And due to this reason, the CEO of the Tokyo Stock Exchange had to resign.

We also saw a similar kind of a downtime on the New York Stock Exchange in 2015, and there was one more issue on the London Stock Exchange in 2008. Hence, we mean to say that it is not something abnormal which NSE did, but one thing for sure cannot accepted, is the behaviour and the response they give back to their traders. As the issue remain understandable by all, but it is not always about the issues, but about how they respond to such issues, their accountability and their communication. Since they are the biggest player in the market and they owe responsibility towards their customers and traders, we do not think that they did their job properly and ensured a healthy communication with the customers.

This article is intended to cater to people who are new in this market, as it’s a good idea to discuss and share about these real experiences, so that you all can express your views and anxiety in such kind of a situation. Since this is a common situation and can happen with anyone out there. So, all we need to do is to be rational and practical and react in a positive way in such times. We hope, all our fellow traders would have managed themselves well, as these are parts of trade and we have to accept it the way it is.

Nobody really cares about traders and that’s the unfortunate part in India and we have to live with that. Now we will have to find out, what exactly happened, if the NSE is kind enough to share the details. But if not, then we just have to move on. But those of you who incurred losses, we would just tell you that, we have to accept the technological risk and the system risk. We definitely believe that you all will be able to recover from the losses and go back to where you were.