Technology

Static IP vs Dynamic IP – Why It Matters for Trading Bots

Split-screen showing "Order Rejected – Dynamic IP" on the left and "Order Executed – Static IP" on the right, with a trader at each terminal, Indian stock exchange backdrop, and Fintrens branding.

If you're running trading bots in India, this distinction can mean the difference between seamless execution and total rejection. With NSE’s 2025 mandate for retail algo trading, understanding why static IPs matter more than ever is critical for compliance and performance.

📈 The Basics: Static IP vs Dynamic IP

Type	IP Changes?	Assigned By	Traceability	NSE Compliance
Static IP	Remains Fixed	ISP/Cloud Provider	High	✅ Required
Dynamic IP	Changes Regularly	ISP/Router DHCP	Low	❌ Rejected

🔎 What is a Static IP?

A static IP is a permanent address assigned to your device or server. It never changes over time and can be uniquely tied to your trading account. Static IPs are provided by ISPs (for local setups) or come bundled with cloud VMs (e.g., DigitalOcean, AWS).

🔎 What is a Dynamic IP?

A dynamic IP is assigned temporarily by your broadband provider or mobile network each time you connect. It frequently changes, cannot be relied on, and is not traceable for regulatory audit purposes.

⚠️ Why Dynamic IP = Rejected Trades

With NSE's static IP circular (Ref: INVG67858), all retail algo trades via API must originate from pre-approved static IPs. If you use a dynamic IP:

Your broker will reject order placements
NSE audits may flag violations
There is no way to trace who placed what order

❌ Using mobile hotspots, VPNs with rotating IPs, or unregistered broadband connections? That’s a compliance failure.

🛡️ Why Static IP is Crucial for Bots

Trading bots (even those placing <10 orders/sec) rely on:

Reliable connectivity
Whitelisted network identity
Auditability for SEBI/NSE tracking

A static IP ensures:

You remain compliant with NSE's infrastructure
Your orders aren’t randomly blocked
Your bot maintains connectivity during volatile sessions

📊 Real-World Scenarios

✅ Example 1: Retail Trader using Zerodha API

ISP: Airtel static IP plan
Setup: Python bot on home desktop
✅ Broker whitelisted static IP
✅ Fully compliant

❌ Example 2: Trader using cloud bot on random VPS

IP: Dynamic IPv6
❌ Rejected at broker gateway
❌ NSE non-compliant

✨ Pro Tip: Use DigitalOcean or AWS with Reserved IPv4

Cloud services like DigitalOcean offer reserved static IPs for each VM.

Predictable pricing
Easy whitelisting
Used by Fintrens bots with 99.9% uptime

💼 Conclusion

The switch to static IP is not just technical—it's mandatory and critical. Whether you're trading with Firefly or building your own bots, ensuring that your IP address is static, traceable, and broker-approved is the foundation of seamless, compliant algo trading.

✉️ Need help setting up your static IP? Leave a comment below and our team will guide you. For technical docs, visit docs.firefly.fintrens.com