High Frequency Trading

What is high frequency trading? What are the factors to be understood?

There are two chief platforms in the Indian Stock Market namely, the Bombay Stock Exchange (BSE) or the National Stock Exchange (NSE) . On the other hand there are other exchanges as well.

Point here to be noted is that, NSE and BSE are not government owned but privately owned and government regulated by SEBI Securities Exchange Board of India.

Companies are completely traded only on one platform.

Some of the ways to be traded in these markets are as follows:

You can trade in these markets in various ways:

Long term trading: A Stock is held for many months to even several years.

Medium Term Trading: The duration of holding is for few weeks to few months

Short Term Trading: Stocks can be held for more than one day to a few weeks only

Day Trading: This is usually known by the term intraday trading. These stocks will be automatically squared off at the end of the day. This is when the market closes for the day, if not purposely traded by then.

What is squaring off?

Squaring off a trade reflects an equal number of shares from the same company have to be bought and sold within the day. They can be sold and bought or bought and sold in either way.

With the dawn of computers and online share trading, physical interaction between buyers and sellers is minimal and the frequency of intra-day trading has increased.

Formerly, the buyers and sellers of the shares had to strike a deal on the exchange.

Computers have enabled online trading that permits a decentralized exchange.

This causes the market to move up and down the index quicker, making the stock market a very fast rate situation.

Highly frequency trading is a computerized trading platform which usually makes usage of computers to dominant to transact a many orders at exceptionally high speeds.

These computers use Algorithm trading or Quantitative trading. Technology permits a round trip within 250 microseconds.

It is imperative that high-frequency trading part of stock market is done by professionals as those new to trading do not recognize the functioning of the market even though they can enter this market at any age, at home.


Timer Based Auto Square Off: For Intraday (Margin Trades), Timer based Auto Square will be done as under: ‐

SEGMENT wise Clients whose Timer Based Auto Square Off will be done for Monday to Friday Square Off Timing to be noted
NSE /BSE Equity /F& O Both Online as well as Offline Clients. 3.15 PM
NSE / BSE currency Both Online as well as Offline Clients. 4.45 PM
MCX AGROCOMMODITIES Both Online as well as Offline Clients. 4.40 p.m.
MCX NON AGRO COMMODITIES Both Online as well as Offline Clients. 11.15 p.m. /11.40 p.m.

RMS Policy of Enrich

Timer Based Auto Square Off won’t take place in MCX & NSE segments. Timer Based Auto Square Off will be done in case of both Online as well as Offline Clients. Moreover, when Commodities Market is open till 11.30 p.m. in the night, Timer Based Auto Square Off will be done at 11.15 p.m. and when Commodities Market is open till 11.55 p.m., Timer Based Auto Square Off will be done at 11.40 p.m. Trades executed under Margin /Intraday Product, Positions / Commodities will be squared off by the system itself at the above declared time in respective segments regardless of the funds available or MTM Profit earning on that day, and if carry forward is to be done, Position Conversion has to be done by the client from Intraday to Delivery/Carry Forward and to the level of positions permitted to be carry forward will be endorsed in respective segments.

If Auto Square Off couldn’t happen due to any technical issues, then the client will be responsible for losses incurred if any.

MTM Based Square Off:

MTM Based Square Off will be carried out if MTM Loss reaches at 75% in case of all Clients, Online as well as Offline in Equity & Commodity Segments.

Under circumstances where the Margin trades are not squared off by the system, the client has to intimate the same to RMS Dept at least 10 minutes before the market closes. This will enable the client’s position to be squared off. The company will not be liable for any unsettled trades and losses occurred due to technical issues.

RMS department is not solely responsible for squaring off of risky clients. The concerned RM is expected to take the initiative on this regard and prevent losses incurring the company.

Penal Charges: Interest would be levied till the date of realization of the cheque or till the payout day for sale transaction for debits in the client’s account beyond T + 2-days.