Realising that a crisis was on hand, the NSE reactivated its stock-lendingwindow on Wednesday. This was utilised by brokers trapped on the exchange togain a breather. The window or, the Automated Lending and BorrowingMechanism (ALBM) of the NSE, helped many members tide over the crisis causedby Tuesday's market crash.

The ALBM window virtually acts as a carryforward of trades (for a week) forthe members, as the NSE is a cash market. Thanks to black Tuesday, the ALBMgot reactivated on Wednesday. The otherwise sleepy segment on the NSE sawhectic activity on Wednesday. Though no official word on the prevailingrates could be obtained from the NSE, according to dealers, lending rates inthe segment were as high as 50-55 per cent per annum at some point of time.Moving in tandem with the rates, the turnover in the segment alsoskyrocketed, and attained its all-time high.

According to the NSE Members Association's former president Vinod Gupta,Wednesday's hectic trading on the ALBM segment (where stock lending andborrowing is done) has been of great help to those members who had ended upwith the burden of a huge delivery at the end of Tuesday's trading.

According to a dealer with an NSE brokerage, many players who had boughtlast Wednesday or Thursday and had not squared off their positions by Mondaywere not able to sell on Tuesday, as the stocks were frozen at the lowercircuit for the major part of the day. Because of the lower circuit, therewas no room for shifting their positions to the BSE, which is the normalpractise. All these players had to pick up delivery compulsorily. Althoughany default was ruled out, as the margins deposited with the NSE and alsothe trade guarantee fund was enough to take care of it, there waspossibility of some brokers ending up with huge losses.

After Wednesday's hectic trading on the ALBM segment, much of that risk hasalso been mitigated, said the dealers. Usually, only a select group ofstocks in the dematerialised mode are permitted on the ALBM segment. OnTuesday, following representations from the NSE Members Association, theexchange had allowed many additional scrips to be traded on the ALBM segmenton Wednesday as a special case.