Understanding NSE's Recent Circular - Penalty on Algorithmic Market Orders?

Support Desk
1

Hello,

I recently read about a circular from NSE (dated JUNE 27, 2023) wherein they levied a penalty on algorithmic market orders. If true, this would hamper a lot retail traders who use APIs for placing orders.

A quick query on this regard - does this circular affect Fyers API users in any way? Meaning, will there be a direct penalty on users for placing market orders through Fyers API? Creating new positions will still be manageable with limit orders if there’s a penalty but squaring off existing positions will be affected heavily. Because I’m not wrong, squaring-off existing positions (HTTP DELETE request on the “positions” API endpoint) triggers a market order. Will a penalty be applicable for such orders too?

A clarity on this will be greatly appreciated. Thanks in advance.

2

Hi @sanjay_khandagale,

Currently, the orders placed on our platform are not being executed as algorithmic orders. This is because the CTCL ID sent to the exchange only allows for normal orders to be placed for API and IBT/STWT/Exe. Additionally, our BO/CO orders do not support Trailing Stop Loss, which further limits the use of algorithms.

At the API level, we have set a limit of 10 orders per second per user. If this limit is exceeded, the orders will be rejected before they even reach the exchange due to rate limits within the system. Therefore, our clients need not worry about quote stuffing, excessive order modification without price and volume change, or any other issues related to this circular.