Explained: What is a fat finger trade and how it can make you lose crores!

The push of an enter key vs a delete button, or a mistaken forward to the wrong number. A fat finger trader is precisely that; the execution of a wrongly punched command. But in the case of a 'fat finger trade,' it could cost the trader a hefty sum when a trade is executed mistakenly by the wrong press of a button.

Also read/watch| India's biggest 'fat-finger' trade; broking house loses Rs 250 crore

If it is a single retail trader who faces a 'fat finger' error the impact is not usually dire. But in today's day of algo trades, a fat finger trade can set a chain-reaction of events in place, similar to the domino effect. In some cases, the downward spiral can be catastrophic, such as during the stock market’s flash crash in 2010.

And it is not as simple as 'oops' as even the biggest trader may not have the option of reversing the call on their own. It usually requires intervention at the exchange levels and most often requires the regulator's nod as well. So next time think before you hit go!