RTCM refers to the Reversal Trade Cancellation Mechanism (RTCM). Effective January 13, 2024, RTCM will be implemented in the Equity Derivatives segment. It aims to identify and cancel reversal trades that meet specific conditions during intraday trading. These are transactions between two parties (identified by their PANs or CP Codes) that are matched in a security/ contract amongst each other and reversed subsequently (e.g.: first leg is where PAN “A” is the buyer and PAN “B” is the seller and second leg where PAN “B” is the buyer and PAN “A” is the seller). This mechanism is introduced to prevent any trades that create artificial volume without legitimate market intent. Such practices can distort price discovery and mislead market participants.

The RTCM mechanism pushes traders towards a more compliant and transparent trading approach. While it may create operational challenges and require strategic adjustments, its implementation ultimately benefits market participants by promoting fairness and integrity in the equity derivatives market. Traders must stay informed, adapt strategies, and leverage technology to align with this evolving regulatory landscape.

Once we get a RTCM confirmation from exchange on your trade, in case of a square off trade being cancelled the limits will be blocked.

After any trade being detected under RTCM and cancelled by the Exchange, your account will be shifted to Square-off mode for the day such that no new positions are permitted. Post which, your trade gets recreated by EOD and will be visible in your Open Positions. In case you wish to execute square off trade cancelled earlier by the exchange the same can executed on the next day.

The account shall be moved to Square off mode where you will be only be able to square off your existing positions. The same is been done to prevent margin shortfall.

RTCM applies for both fresh or existing open positions.

If your account is moved to Square Off mode, no fresh orders will be allowed for the day and you can only be able to square off your existing open positions. However, the trade cancelled by Exchange under RTCM gets recreated by EOD and will be visible in your Open positions. You will then be able to place fresh orders.

If your GTT order is identified under RTCM and cancelled by the Exchange, your account will be shifted to Square-off mode for the day such that no new positions are permitted. Post which, your GTT trade gets recreated by EOD and will be visible in your Open Positions. In case you wish to execute square off trade of earlier cancelled trade by the exchange or place a new GTT order, the same can be executed on the next day.

If your trade is identified as a reversal trade, it gets cancelled by exchange automatically and the same will be communicated through an update in your online trading account and email.