Freak trades in F&O, removal of execution range, the importance of limit orders

[Michael Gonsalves]

Nithin Kamath of Zerodha has pointed out that there has been an increase in freak trades and what traders can do to steer clear of them, and what Zerodha is doing.

This is very relevant because over the last couple of weeks, many traders have been sharing screenshots of "freak" trades being executed far away from the current market price in F&O contracts on social media. These incidents are especially around index F&O contracts.

A good trader always does whatever to reduce risk on things that can be controlled, like using limit orders instead of market orders and using SL over SL-M, especially when trading contracts with a shallow market depth, he has explained.

https://zerodha.com/z-connect/traders-zone/freak-trades-in-fo-removal-of-execution-range-the-importance-of-limit-orders-and-more

https://twitter.com/Nithin0dha/status/1429456969123852288