Abt these high values in 'open' - no gimmicks or biggies eating retailers. Just read about how nse calculates open prices and everything will be clear.
Thanks - point noted ! You may have more info on this system adopted by exchanges !
What I know is , Freak trades cause large price swings often because of mistakes in order entry, made worse by the freak trades triggering stop-loss orders.
Some time back , there were rampant freak trades happening prvsly due to Market Order flaws in the system itself. And some traders were in losses of a few Lacs of Rs.
And to avoid this, may be in around Sept, 2021, exchanges made some changes in StopLoss procedures in Market Order type execution , which were supposed to accept only LIMIT orders ( and which restrict such execution to a predefined price. The move was expected to help contain damage if there are freak trades that cause large price swings often because of mistakes in order entry ).
QUOTE
"Such freak trades are possibly occurring on account of low liquidity caused by new stringent margin norms of SEBI that have increased the capital requirement for traders/speculators. Thus, drying up most of the liquidity from the futures market ecosystem,"
Another reason could be, since august 16, 2021, the National Stock Exchange of India (NSE) has completely discarded execution ranges, price bands within which contracts can trade.
Prior to this, the NSE used Trade Execution Range (TER) mechanism as a risk management measure which ensured that market orders didn’t execute beyond a defined execution range.
"This system was avoided because when prices of underlying securities swing dramatically, it created a barrier to price discovery,"
This change of stance puts the exchange in line with practices that are followed by other exchanges around the world, which is not to have such restrictions and allow demand and supply at any given time to determine at what price a trade gets executed.
"Their (NSE) stance seems to be that traders have to be careful about this while placing orders on the exchange and that contracts being completely banned from trading for a few minutes is a lot worse than a few freak trades,"
UNQUOTE
... So the saga of freak trades still continue albeit in a lesser instances - since traders are now more Educated to avoid Market Orders and use only LIMIT orders !
May be , more development might have happened recently - which I am not aware-of !