What Is the Co-location Facility?
To better understand the scam, you need to get a clear-cut understanding of the co-location facility. In layman’s language, co-location is a space where you would get to know the stock prices a bit earlier than most of the crowd, thanks to the highly computerized system. Several algo traders rent out these areas for trading in the market.
These are precisely next to the exchange servers area in the NSE. Since the facility is closer to the stock exchange server, traders got an upper edge in improving the latency period. Brokers and investors mainly use the co-location area for proprietary trading.
Because of the proximity to the exchange server area, these traders got prior information about the stock, buy/sell orders, and many more. Brokerages operate from all over the country, especially in the metro cities like Mumbai, Delhi, Kolkata, Bangalore, and many more. Each and every brokerage has its clients who log in at various times and place their orders. Prior information about the price won’t affect the retail investors, but it helps the big traders who bet large chunks of money on the market.
NSE Co-location Scam: Everything You Need To Know!
Stock Market scams aren’t new. India has witnessed several scams that have caused enormous losses for several investors all over the country. Each of the scams has its own story and uniqueness. The co-location scam is one such unique case in the history of the Indian Stock market that you would love to read till the very end. So let’s dive into the details of the scam before any delay.