The October Nifty futures, the most traded contract on the 50-share NSE benchmark, likely witnessed a freak trade on Thursday as premiums over the spot market surged dramatically to near 6,000 levels. (Also read: What is freak trade in stock markets)
October future prices on the Nifty jumped 2.8 per cent to a high of 5,996 before paring gains. At these levels, the near month contract (October futures) was priced higher than the next month (November future) prices, which made a high of 5,984.
Generally, next month and far month contracts are priced higher than near month contract because of cost of carry charges.
As of 09.45 a.m., the October futures traded 1.7 per cent higher at 5,928. The spot Nifty traded at 5,874, up 95 points.
Analysts said that trades at 5,996 levels would have been executed because of a punching error.
Last year, the spot Nifty had dropped over 900 points to a low of 4,888 in a freak trade because abnormal orders resulted in multiple trades at low prices.
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