High Frequency Trading

Overview

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. 

Earlier, 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.

High frequency trading is a computerized trading platform that usually makes the usage of computers dominant to transact 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 the high-frequency trading part of the 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.

What Is Square Off in Stock Market?

Square off in the share market is a trading strategy where a trader or investor buys or sells a stock or security and then reverses the transaction to profit from price movements. 

Brokerage firms levies a broker charge for square off in trading. Therefore, traders calculate their daily profits by subtracting broker charges and taxes from the price difference. 

Let's explore squaring off in more detail in this comprehensive guide.

What Is Square Off in Trading?

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

Square Off Policy with Enrich Money

Timer-Based Auto Square Off: For Intraday (Margin Trades), 

Intraday auto square off time will be done as under: -

 

RMS Policy Of Enrich Money

• There is no auto square off time for MCX and NSE segments. 

• Intraday auto square off time is available for both online and Offline Clients. 

• Moreover, when Commodities Market is open till 11.30 p.m. at 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 carried 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 carried 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 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 that occurred due to technical issues.

The RMS department is not solely responsible for squaring off risky clients. The concerned RM is expected to take the initiative in 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.

Frequently Asked Questions

What are the types of trading in the share market?

A share can be traded in various ways in the Indian stock market.

• 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 a 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 are stock exchanges in India?

The two major stock market exchanges in the Indian Stock Market are, namely, the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). While there are other stock exchanges as well in India.

The point to be noted is that NSE and BSE are not government bodies but they are separate entities regulated by the SEBI (Securities Exchange Board of India). Companies which are traded are listed in the stock exchange in which they are traded.

What is Time Intraday Square Off?

Intraday square off typically occurs before the market closes, usually a few minutes to an hour before the end of the trading session. The exact timing can vary depending on the broker and exchange regulations. Traders need to ensure they close their positions within this timeframe to avoid them being automatically squared off by the broker.

What Is Intraday Square Off?

Intraday square off is the process of closing out open positions in a trading day before the market closes. This is commonly done by traders to avoid carrying over positions to the next trading day, as intraday positions are meant to be squared off within the same trading session.

Name the types of square off ?

There are two types of square off namely, intraday square off and delivery square off.