https://v2.webnotes.in/tags/erroneous/Recent content in Erroneous on WebNotesHugoen-INWed, 20 May 2026 00:00:00 +0000https://v2.webnotes.in/freak-trade-loss-penalty/Wed, 20 May 2026 00:00:00 +0000https://v2.webnotes.in/freak-trade-loss-penalty/<p>A <strong>freak trade</strong> is an extremely off-market execution: a trade at a price far from the prevailing market. Indian exchanges have a framework for annulling or compensating affected parties for genuinely erroneous trades.</p> <h2 id="exchange-annulment-framework">Exchange annulment framework</h2> <p>NSE / BSE rules:</p> <ul> <li><strong>Threshold:</strong> Trades executed at prices significantly deviating from prevailing price (specific thresholds defined).</li> <li><strong>Investigation:</strong> Exchange surveillance reviews; verifies if a genuine error.</li> <li><strong>Annulment:</strong> If confirmed, trade is annulled.</li> <li><strong>Compensation:</strong> Affected counter-parties compensated per the framework.</li> </ul> <h2 id="when-the-framework-applies">When the framework applies</h2> <p>Genuine freak trades:</p>