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Orders getting executed when prices are not visible on the charts – What you need to know

One of the queries we are receiving is about Orders getting executed when prices are not visible on the charts. The confusion has led to a conspiracy theory among traders that have faced this dilemma that it is a kind of malpractice by brokers to deceive the client and earn profits. I can assure you that it is an imaginary demon and we don’t have any vested interests to deceive or manipulate our clients. I believe the misconception is primarily due to the lack of awareness about how the order matching and execution works on Indian exchanges. To simplify this, let’s understand the essential criteria:

The order matching system at the exchange is fully automated and algorithmic in nature. The trading system at exchanges supports an order-driven market and provides complete transparency of trading operations. Orders, as and when they are received, are first time-stamped and then immediately processed for a potential match. If a match is not found, then the orders are stored in different ‘books’. Orders are stored in price-time priority in various books at the exchange in the following sequence:

  • Best Price
  • Time Priority

The best buy order will match with the best sell order. An order may match partially with another order resulting in multiple trades. For order matching, the best buy order is the one with the highest price and the best sell order is the one with the lowest price. The system views all buy orders available from the point of view of a seller and all sell orders from the point of view of the buyers in the market. So, if all buy orders available in the market at any point in time, a seller would obviously like to sell at the highest possible buy price that is offered. Hence, the best buy order is the order with the highest price and vice-versa.

Orders lying unmatched in the system are ‘passive’ orders and orders that come in to match the existing orders are called ‘active’ orders. Orders are always matched at the passive order price. This ensures that the earlier orders get priority over the orders that come in later.

This is the mechanism which executes the order at exchanges but, why don’t you see your price on the chart whereas your order has been executed?

The exchanges mainly send two types data feeds to the subscribers depending upon the time interval. Tick-by-Tick data is the market data that shows price and volume at every tick, it means every single change in the price, volume and change in best bid and ask has been reported to the subscriber of the data feeds. Another type of data feed is Second Pulse which is the last traded price for the particular second and data is transmitted to the following second.

On a normal trading day, there are millions of such ticks recorded, and the exchanges do not send us all the traded data per second. There are times when the OHLC data sent by the exchanges does not show the freak trades which could have occurred during the time frame. In addition to that, NSE Tick-by-Tick data very expensive to store and transmit as compared to the level-2 data feeds, i.e. Second Pulse. It’s the high-frequency trading desks, arbitrage traders and firms that trade ultra-short term algorithmic strategies typically use Tick-by-Tick data. Such trading firms compete for speed in microseconds (1 million microseconds = 1 second) and invest heavily in infrastructure to get an edge over others by just a few microseconds. TBT data has no use-case for retail traders as the decision making criteria is entirely different.

All the trading and brokerage platforms receive a Second Pulse sent by the exchanges, which is the last traded price for a particular second. Brokerages transmit the live data feed from the exchange and onto their platform. In between the two consecutive pulses a large number of trades can get executed and a trades executed between transmission gap of the two pulses are not captured in the Pulse sent by the exchanges.

As on the charting platform, you see only the second by second OHLC data or tick; it is quite likely that you don’t see all the traded prices on the charts in some cases. Unless and until the exchanges (The source of data) provide access to tick by tick data, we cannot possibly capture those price points. However, people claim this as a kind of malpractice from the broker’s end, to be clear, brokerages don’t have any control over the order execution as it is complete system driven and solely controlled by the exchanges, unlike a quote-driven market wherein the broker is a market-maker and is thus trading against clients.

If your trade is executed on NSE for instance, you can be assured that a particular price is traded and trades can be verified on the NSE’s Trade Verification module. Here, data on trades would be available on T+1 day and at any given point in time ten trading days’ data would be available for verification. Moreover, as per the regulatory norms exchange has been sending the details of the transactions, by the end of the trading day, on the mobile number and/or email address which are registered by their brokers.

Please note that FYERS does not gain anything by trying to hide or manipulate price/trade data in any manner whatsoever. As a brokerage, we are mainly focused on providing the best trading experience and also increasing awareness about such topics which are not discussed. In this context, I’d also like to mention that FYERS does not indulge in any proprietary trading activities, unlike many other brokers. Hence, there is no way that we can benefit from such alleged manipulations. I hope that I have provided enough clarity to debunk this conspiracy theory :-).

If you find this post useful, share it with other traders who have been affected by it but are unaware of the reasons as to why it can happen sometimes. In case if you have any doubts, you can ask us in the comments section below.

Happy Trading!

Tejas Khoday

Tejas Khoday

Tejas is the Co-Founder & CEO at FYERS, the youngest team to get NSE’s broker license. He has a specialization in finance and has over 10 years of work experience spanning across proprietary trading, risk management, and broking. Tejas & his team started FYERS, a technology-focused brokerage as a mission to transform the trading/investment landscape in India.

63 Comments

  • Avatar Shubham says:

    I think this is the most informative blog post so far, for me 🙂
    I also was assuming market manipulation or something sinister like that for couple of things I saw on the chart…. Also looks like it is more common with MCX…

    • Tejas Khoday Tejas Khoday says:

      It happens occasionally and it tends to get blown out of proportions because most people don’t know how the mechanism works. I hope this blog will throw some light. We have already communicated traders’ concerns to MCX.

      • Avatar Anjany Kumar says:

        Hello sir can you add PRIOR DAY OHLC indicator because it is very useful for trader. Manually high/low marking in every stocks are not a easy task. So i requested to you plz add this indicator

      • Tejas Khoday Tejas Khoday says:

        Your feedback has been noted. Thanks, Anjany!

  • Avatar swapnil kelkar says:

    Nice blog for stock market.

  • Avatar Praveena NG says:

    Dear Tejus,
    Request for 4 minute Chart for Commodity
    regards,
    Praveena

  • Avatar Anbarasu A says:

    Hello Sir,
    Is there any option available for alerts creation on Fyers trading platform for price , percentage change, crossing trendline.It would be great if implemented.

    • Tejas Khoday Tejas Khoday says:

      Hi, not yet. But it will be after we complete our current projects. It is a priority but not an immediate one! I know it is important and we’ll take it up soon.. Thx!

  • Avatar Samarth says:

    I have enter sell limit CO order for CRUDEOIL19OCTFUT 1 lot at 08:04pm 30-SEP-2019 price 3924 and my SL was 3949 / I checked my system after an hour and my SL was hit for 3950.. leaving me in loss of 26 points x 100 INR = 2600.00 / based on chart price never crossed 3940 then how it is possible to execute my SL.. i feel I am being cheated by FYERS. rs0230

    • Tejas Khoday Tejas Khoday says:

      Samarth, I have written this blog post just to explain how and why this happens. The order execution is handled by the exchange and not us. We merely send your orders to the exchange. The exchange matches the bids & offers and executes the trades. As mentioned in my post, not all ticks are received by brokers in real-time feeds This is an issue and we have already asked the exchange to do something about it but it is not in our control. There is not question of cheating you here. You are our client and we are on your team.

      • Avatar Samarth says:

        Hi Tejas,

        Thank you for you prompt reply.. But these need to be fixed.. if it was 1-2 points understandable but difference of 12 points not acceptable.. as it shows high of 3938 and my sl was at 3949

      • Tejas Khoday Tejas Khoday says:

        Our team has already communicated with MCX and told them about these issues that some traders have been facing. However, the implementation is up to them. I cannot comment on the challenges they face at their end so it’s hard for me to say anything. I hope that it will be resolved soon for everyone’s benefit.

      • Avatar Venkatesan says:

        Tejas ji,then how can we avoid such trades?

      • Tejas Khoday Tejas Khoday says:

        There is no silver bullet. Any trader who uses Level 2 data is exposed to this. It’s part of the game, I guess.

  • Avatar Parth Patel says:

    Hello Mr. Tejas,

    You have cleared all doubts regarding price does not match with chart. I have share it to many groups as well so it will help others.

    I have a small suggestion. In CO, we are getting as single SL but, in BO, there are number of SL and TARGETS as per the number of trades in particular script. Can fyers provide the facility like cover order? It will be easy to shift SL or TARGET in single click like CO in BO as well. One more thing you can add like ODIN platform that any body can modify partial order as well.

    • Tejas Khoday Tejas Khoday says:

      Hi Parth, Glad you found it useful. Currently, we won’t be able to change the bracket order mechanism. It’s implemented in a certain way that ia apt from an execution standpoint.

  • Avatar PT KUMAR says:

    Sir, it is a feed back from my side…I do observe in some platforms viz. in TRADINGVIEW – that they had provided a function of x% qty squareoff when traders wants it i.e., when a trader opened his position based on some strategy using BO or NORMAL order, and at 1:1 Risk Reward ratio to cover 50% or 25% or 75% or his defined portion of open order, (the system accepting that portion with a single click) even in Bracket Order also.. is this facility available in our platform also, please reply…

    If not please try to provide that facility in future which is very much useful for intraday traders in CASH MARKET.

    • Tejas Khoday Tejas Khoday says:

      TradingView does not provide trading functionality as it is a charting tool that we use. The feature that you mentioned is certainly useful but difficult to implement at the moment. Thanks for your feedback. In the meantime, you may have to manually calculate your scale-in and scale-out of trades.

  • Avatar PT KUMAR says:

    thank you for you explanation Mr. Tejas…you cleared all my doubts…

    • Tejas Khoday Tejas Khoday says:

      Hey PT Kumar, Thanks. If others have similar doubts, please feel free to share it with them.

  • Avatar ANIL PARSANIYA says:

    thanks khodayji great!

  • Avatar SUKHENDU GHOSH says:

    Firstly, why we face such issues only with discount brokers? Secondly, there are issues with bracket & cover orders as well. My bracket orders were terminated before reaching the target and your customer support persons do not have any knowledge to clarify our issues. Can anybody clarify this?

    • Tejas Khoday Tejas Khoday says:

      Hi Sukhendu, This is not specific to discount brokers as such. It’s just that discount brokers are more open to communication and you at least get to know why things have gone wrong. This can bring them a lot of negative publicity too since traditional brokers are not known for giving you clarity if it happens on their platform. Secondly, the clientele of discount brokers tends to be more active and communicative.

      With regards to the bracket order getting executed, I’d say that it is connected to what I have said in the blog. It does happen sometimes but it is not because the order functionality was wrong but because the data ticks of trades which have happened may not have been made available by the exchange.

  • Avatar Arvind says:

    Tejas, your blog is informative. However it still leaves one are unexplained i.e. possibility of manipulation by brokers who also trade through their proprietary trading. This is the main doubt that retail clients have about their brokers.

    • Tejas Khoday Tejas Khoday says:

      Hey Arvind, Just to clarify that we don’t do proprietary trading or any activity which can be considered conflict of interest with our clients. In that context, we’re probably the only ones who can say this confidently. I can’t comment about other brokers’ practices. Thanks.

  • Avatar D.A.Sudhakar says:

    Thanks for such a detailed write up. This has cleared my doubt.
    But still I have one more doubt. Do we have this problem in limit orders also.

  • Avatar Suneetha says:

    Very useful information for the beginner like me. Thanks for posting this.
    Sir, is it better to place the limit orders to avoid this problem?

    • Tejas Khoday Tejas Khoday says:

      It’s not the type of order but rather what the exchange is capturing during the 1-second timeframe.

  • Avatar Dr.Tushara Rao says:

    This is a very informative for a someone new to stock market like me. You have explained in such a simple manner that even some new to stock market can understand this. Thanks a lot for keeping it so simple.

  • Avatar Shubnam says:

    I thought exchange provide the 1 min candle data to all. Y dont they provide?

    • Tejas Khoday Tejas Khoday says:

      The exchange provides data every second for all the scrips listed on it. They do provide data in real-time so that can be converted to any timeframe including 1-minute.

  • Avatar Vara Prasad says:

    Even for a regular trader like me had this doubt. Thanks for clearing the doubt. This blog is not only useful for new traders but also for a regular trader. Your blogs are very useful and informative. Thanks for writing this.

    • Tejas Khoday Tejas Khoday says:

      Yeah, it’s more useful for those who have experienced this issue at least once before. Thank you!

  • Avatar Viren says:

    Why doesn’t exchange provide the highest and lowest ltp during that second?

    • Tejas Khoday Tejas Khoday says:

      The exchange provides only the LTP per second and not the entire consolidated data every second. It would take up a lot of bandwidth and speed to be able to do that. Currently, it is not available. If they did provide that data, we would be happy to publish it on our platform.

  • Avatar Harsha Vardhan says:

    Thanks a lot for such a detailed explanation. This cleared my doubt and thanks once again for writing and sharing with us.

    • Avatar Dhruv says:

      Ok, Tejas. Agreed with what you said. But I have one more doubt. If you clarify on it, I will be grateful. 🙂

      My question is, why the P&L figure in fyers web platform and in contract note differs? Now don’t tell me that STT and taxes are included in contract note. I am talking about net p&l figure without STT and taxes. Net p&l figure don’t match in platform and contract note. Please clarify on that also.

      • Tejas Khoday Tejas Khoday says:

        The P&L in the trading platform does not account for the charges Dhruv. After day-end process in the back office, it is updated with the following details as mentioned in the contract note:

        1. STT
        2. Brokerage
        3. GST
        4. Exchange Transaction Charges
        5. SEBI Turnover fees
        6. Stamp Duty
        7. CM Charges

    • Tejas Khoday Tejas Khoday says:

      🙂

      • Avatar Dhruv says:

        Hi Tejas,

        You didn’t read my question properly. I said, I am talking about the figure which doesn’t count STT, brokerages and taxes in contract note. Contract note also contain the net P&L figure, right? Then STT, brokerages and taxes are added in that. And then total is done. I am talking about the figure before STT, brokerages and taxes added in it.

        I am talking about the figure specifically mentioned as “Pay in/Pay out obligation” in contract note. That figure and the p&l shown in web platform doesn’t match. I raised the complain also regarding this and provided screenshot and contract note but no solution provided. Then I just accepted it as it is but since now you made a blog post, I had to ask this. Why is there a difference between those two figures? One is on web platform and one is on contract note?

      • Tejas Khoday Tejas Khoday says:

        Hi Dhruv, Got your query. Have you raised a support ticket regarding this? If yes, do give me the number and we’ll check this in detail and revert.

  • Avatar Tipendra Mehta says:

    Is it that the tbt data is costly in India and available cheaper in the developed countries such as the US, Japan etc and therefore such countries have a high amount of market participants compared to India? The exchange should give it a thought I believe.

    • Tejas Khoday Tejas Khoday says:

      Hi Tipendra, TBT data is very costly to purchase from the exchange, store and transmit to our clients. It makes it unviable with our brokerage rates. I have traded with TBT data and it doesn’t make much of a difference if you are a casual trader with a small capital.

  • Avatar Ramranjan Trivedi says:

    This was indeed needed to clarify the doubts of my few clients associated with Fyers. Thanks for sharing this Tejas, keep it up.

  • Avatar Pooja says:

    NSE should give tick by tick data to everybody otherwise it is not fair. Why should the retail trader have a disadvantage just because he has lesser money and cannot subscribe to TBT data? WHy is Sebi silent on this..

    • Tejas Khoday Tejas Khoday says:

      Hi Pooja, yeah in the ideal world. But it’s all about who can afford TBT and what they can do with it. It is also very expensive so you can imagine. The practice of privileged data, co-location, etc. is a prevalent practice world over. I cannot comment about the regulator’s stance on this matter.

  • Avatar Salimja1972 says:

    Hi Tejas,
    Is stop-loss hunting works here? as an abrupt shift in prices with volume can’t be done by the humans or manually and there must be bots placing orders or is scalping system working behind?

    • Tejas Khoday Tejas Khoday says:

      Hi there, HFTs definitely hunt for stop losses and pending orders. That’s what it’s all about! :-). And yes, it’s done by algorithms.

  • Avatar Arnab Roy says:

    I got to know about this post on Twitter through one of my friends. I was unaware of this fact and assumed something else until the date. I just explored other blogs here and found very useful and informative. Just of curiosity, are guys sell Level- or Level-2 data to Ambibroker traders?

    • Tejas Khoday Tejas Khoday says:

      Yeah, if you use our APIs we do provide level 2 data which you can then plug into Amibroker.

  • Avatar RAJ says:

    Oh finally I found this, Thank you for details, appreciate it

  • Avatar ShanthGowdru says:

    Thank you for this wonderful blog Tejas Sir.
    When can we expect 5 Second charting system in India, because US stock markets provides 5sec charting data which will help many people understand and also check the real-time data?

    Sincerely,,,

    • Tejas Khoday Tejas Khoday says:

      5-second charts? Damn, clients like yourself keep us on our toes all the time. Your feedback is noted and we’ll try to take it up in the near future. Although I cannot commit on the timelines before bouncing it with the tech team.

  • Avatar Ayush says:

    Suppose I trade I place best bid at Rs. 100 with 10 shares and after me another bid is placed at Rs. 100.05 but the quantity is larger at 1000 shares, which will be given first priority according to the exchange?

    • Tejas Khoday Tejas Khoday says:

      1. In the example you have given, the person who placed a higher bid than you at 100.05 will get the first priority as his bid is higher than yours.
      2. If you modify your order to match his bid price at 100.05, he will get the priority as he placed the bid at that price first. You followed.
      3. The quantity of shares has nothing to do with it.

  • Avatar Ayush says:

    In time priority is it first in first out method or last in first out if quantity is larger?

  • Avatar Vinay says:

    I am new to trading , the information you wrote is enlightened me.

  • Avatar Rahul_Traderst says:

    Hi Tejas,
    Thank you… the information is very clear and helpful.

  • Avatar Bikash says:

    Most Awaited Topic.Thanks a lot for sharing the issues in details.

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