Nifty options 14500 CE freak trade | 250 Crores loss in a trade?

Nifty 14500 CE trade which made day low price of 0.15 and day high price of 2139, due to erroneous order by a broker who lost 250 crores. Some ppl claim few others brokers made 50 to 75 crores profits. But what really happened? Here’s the tick data analysis that shows true info

Yesterday being a weekly expiry market was so calm, not making any major movements. Nifty was trading around 16500 but there was a freak trade happened with deep In the money option 14500 CE. It was trading around 2000 levels, usually the liquidity will be very shallow with ITM

it was hovering around 2000 to 2100 levels but suddenly around 2:30 pm, the price of the option went as low as 0.15 paise. Here’s the tick data price chart of 14500 CE option strike

What’s really interesting about this sudden move is, usually when a freak trade happens it last for few seconds and instantly get back to its average traded price levels. But in this case, there were many buy trades executed at a very low price.

Obviously this a fat finger error trade, where a broker based out of Kolkatta, erroneously placed sell order for 14500 CE instead of 16500 CE.

Tick Data Analysis:

Here’s the time line analysis
This freak movement happened around 2:30 pm, when we checked the tick data of 14500 CE, we could see that last traded time was 12:57 for a long time. After 12:57 pm, there was no trade executed with the counter 14500 CE.

Then around 14:34:08 a new trade happened. Next three seconds, LTP went from 2063 to 1407.

After that, next buy order came around 14:35:01 with 2000 quantity purchased at Rs. 1320. That’s almost for 1 minute no other trades executed. Just one trade executed. Again next trade executed at 14:36:08 with 500 quantity purchased at 805 Rs.

The real jackpot buy trade came in after 14:36:51 with huge quantity purchased at less than Rs.2 thousands of quantity’s were purchased at extremely low price around 14:37

By 14:38 price of 14500 ce came back to its average traded price of 2000 levels. Then the liquidity in the counter increased, probably people who were luck to buy at the extremely low price were liquidating their position.

Conclusion:

Many people wrongly assumed that 1000’s of lots were purchased at extremely low price of 0.15 paise. No, only few quantities were filled in at this lower price. Around 920 lots were purchased at an average price of 0.95 paise & Around 142 lots were purchased at 18

If we calculate 920 lots * 50 qty * 1 Rs. = Rs. 46,000 total investment. Assuming they liquidated around 2000 Rs. then its 920*50*2000= 9.2 Crores. With an investment of around Rs.50k, someone made 10 crores. That’s all, its not 100 of crores as we see in news.

So the windfalls profits or loss that we see on news media is highly exaggerated. Just because we see a extremely low price or high price in a chart doesn’t necessarily mean most of the trades are executed at that extreme prices.