BTST calls

[Agilent]

Agilent

Here are some facts:

1. Most online brokers (like 5Paisa, Indiabulls etc.) have what they call a 'pool' account. When you buy shares which do not fall under Trade-to-Trade segment, these generally find their way into this pool account rather than your demat account.

2. All brokers including ICICI Direct allow short selling on intraday basis on select stocks.

3. On D+0 day, suppose A short sold 100 shares of XYZ fully expecting to cover the open position at the end of the day. And as the day progressed A covered 50 shares at one time, 25 after 2 hours ... leaving a balance of 25 still uncovered. For some reason or the other, this balance short position did not get covered ... so A has defaulted ... sold something he does not have. Thus in a delivery based market, a shortage of 25 XYZ shares has been created.

4. B bought 100 XYZ on D+1 day and sold under the BTST system on D+2 day to C. He made his profit/loss without taking delivery, but his broker now is responsible to take delivery of 100 ABC on D+3 day and give delivery on D+4 day to C.

5. If B's broker receives only 75 XYZ, he makes good the shortage from his pool account and at the same time initiates a short delivery action by means of which 25 XYZ are bought through auction and cost debited to A. This replenishes the broker's pool account.

6. B's broker then passes on the delivery of 100 XYZ to C.

End of story. Penalty is only levied on A. Secondly your answer as to how a short delivery is possible is also answered.

Regards
Kuldeep

Truly useful.. thanks Kuldeep

How do I commence short selling on ICICI Direct, and where do I see the list of stocks allowed for this

AGILENT

 

[agupta]

5. If B's broker receives only 75 XYZ, he makes good the shortage from his pool account and at the same time initiates a short delivery action by means of which 25 XYZ are bought through auction and cost debited to A. This replenishes the broker's pool account.

Kuldeep,
What if the broker does not have the scrip in the pool a/c on the required day in the required quantity? Also, in your knowledge, does any of the corporate brokers (Indiabulls, ICICI, Religare etc.) allow BTST? I asked a rep of ICICI once and he said that they don't "normally" (he could not give a satisfactory definition of abnormal conditions when they do allow ).
Thanks
Amit

 

[kuldeep49]

Kuldeep,
What if the broker does not have the scrip in the pool a/c on the required day in the required quantity? Also, in your knowledge, does any of the corporate brokers (Indiabulls, ICICI, Religare etc.) allow BTST? I asked a rep of ICICI once and he said that they don't "normally" (he could not give a satisfactory definition of abnormal conditions when they do allow ).
Thanks
Amit

Amit,

Yes ICICI does allow BTST in select stocks. The other feature of ICICI which prevents short delivery from taking place from their clients is that all intraday short trades are compulsorily squared off by the system at 2.50 pm. So if you don't act, the system does.

As regards pool accounts, ICICI does not maintain one as its trading is basically for delivery. However, other large brokers maintain large pool accounts to facilitate intraday trading by their clients (after all, these are shares of their clients). Yes, it is theoretically possible for the pool account not to have the scrip but in practice this would be the rarest of rare things. In any case, large defaults do occur as are evidenced by the scams we all are familiar with. In which case the system breaks down!

Rgds
Kuldeep

 

[jdm]

Amit,

Yes ICICI does allow BTST in select stocks. The other feature of ICICI which prevents short delivery from taking place from their clients is that all intraday short trades are compulsorily squared off by the system at 2.50 pm. So if you don't act, the system does.

As regards pool accounts, ICICI does not maintain one as its trading is basically for delivery. However, other large brokers maintain large pool accounts to facilitate intraday trading by their clients (after all, these are shares of their clients). Yes, it is theoretically possible for the pool account not to have the scrip but in practice this would be the rarest of rare things. In any case, large defaults do occur as are evidenced by the scams we all are familiar with. In which case the system breaks down!

Rgds
Kuldeep

yes many broker have this practive of pool a/c. but the law of the land does not permit the broker to do so. hefty fines are imposed if sebi finds the same in their audit.

cheers,
jdm.

 

[kuldeep49]

Truly useful.. thanks Kuldeep

How do I commence short selling on ICICI Direct, and where do I see the list of stocks allowed for this

AGILENT

Agilent,
ICICI Direct has a list of stocks in which it allows margin trading. There are 2 categories, margin & margin plus. In margin plus your margin is only 5% and you have to enter your entry & exit price at the time of placing the order. Whereas in Margin, the margin requirenment varies from 25 to 50%. In both cases you have to square off by 1450 hrs (i think) otherwise the system does it for you automatically. Yes. in this case, ICICI allows you to short in intraday trading.
Rgds
Kuldeep

 

[Agilent]

Agilent,
ICICI Direct has a list of stocks in which it allows margin trading. There are 2 categories, margin & margin plus. In margin plus your margin is only 5% and you have to enter your entry & exit price at the time of placing the order. Whereas in Margin, the margin requirenment varies from 25 to 50%. In both cases you have to square off by 1450 hrs (i think) otherwise the system does it for you automatically. Yes. in this case, ICICI allows you to short in intraday trading.
Rgds
Kuldeep

Thanks Kuldeep

So u mean intraday shorting can be done in Margin as well as Marginplus, right? Whats the brokerage by the way?

But u still have to explain to me (in context of BTST) how a short delivery can result in a scenario where the seller is selling from Dmat holding (regardless of whether its online or otherwise)

AGILENT

 

[sunilm02]

A very good discussion held here...
I benefited a lot from this discussion...
Please carry on!!

By the way, I have one question... It would be great if anyone can answer this :

In sharekhan DP/SR report, there are 4-5 columns :
DP Balance, Receivable Balance, Client Stock Balance, DP Margin Balance, Margin Funding Balance, SK Locked , Net Available Balance

Can you help me with those.. What do they mean and when can I sell my stocks safely.
Can I sell stocks when they are in Client Stock Balance or do I have to wait till it comes to DP Balance..

Thanks a lot
SUNIL

 

[rpkunn]

A very good discussion held here...
I benefited a lot from this discussion...
Please carry on!!

By the way, I have one question... It would be great if anyone can answer this :

In sharekhan DP/SR report, there are 4-5 columns :
DP Balance, Receivable Balance, Client Stock Balance, DP Margin Balance, Margin Funding Balance, SK Locked , Net Available Balance

Can you help me with those.. What do they mean and when can I sell my stocks safely.
Can I sell stocks when they are in Client Stock Balance or do I have to wait till it comes to DP Balance..

Thanks a lot
SUNIL

DP Balance is when you receive the shares you have brought (T+2 days). These shares will be in your demat account. Receivable balance is the shares you brought but still you haven't received it. You may trade on these shares but the sale comes as a short (which means you need to purchase back and book profit/loss). Ideally sharekhan wants you to trade on the particular share once you have the delivery (settlement).

When you place a sell order of your stock from your DP/SR, then the shares are 'SK locked' - which means that you cannot trade in them, unless you cancel the order.

hope this will help.

 

[firearm12]

Hi Guys,

I am a newbie to trading and just received my icicdirect account. Mistakenly or say foolishlty, I bought some shares under BTST. Now I just want to whether it is neccessary to sell these within T+2 days.What would happen if I wont sell them next 3 days? Also how can one purchase shares normally that are under BTST.? Are any extra brokerage burdened on me for BTST.

 

[rajeabc]

Hi Guys,

I am a newbie to trading and just received my icicdirect account. Mistakenly or say foolishlty, I bought some shares under BTST. Now I just want to whether it is neccessary to sell these within T+2 days.What would happen if I wont sell them next 3 days? Also how can one purchase shares normally that are under BTST.? Are any extra brokerage burdened on me for BTST.

its not compulsory to sell your shares in BTST. Actually normally bought shares will also be eligible for ST(tough not all). Brokerages are same for BTST and Normal cash delivery.