Intraday Shortage penalty

Discussion in 'Investors Grievances' started by arjunkr, Nov 29, 2007.

  1. arjunkr

    arjunkr New Member

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    Dear friends,

    I had done short sell of 1000 shares of Essar oil with margin on 29th/nov/2007 and could not square off at the end of the day
    is that i have to pay any penalty to broker i.e India infoline.
    Please help me as to whether I have been cheated by the broker.
     
  2. pakatil

    pakatil Well-Known Member

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    Normally Day Trade Positions are squared up on the same Day. If Open Short Position is carried, You have oppurtunity to buy it up the next day to square. ( i.e., 30/11/207). Buying Price will determine your Profit/Loss . No Penalties. If you don't square it up on 30th, It will go to Auction on 3rd and then Auction Price will determine the Profit/Loss.

    Cheers
    PAKatil
     
  3. arjunkr

    arjunkr New Member

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    hai thanks for the reply..but this broke..ie indiainoline is saying that i will be charged 20% of total amout i.e 40 k for 2 lakhs + profit/loss of next day ...as i have done it with margin trading..
    is it so with indiainfoline..?
     
  4. pakatil

    pakatil Well-Known Member

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    In the First Place, you should be allowed to buy on 3rd to square up.

    If you don't square on 3rd for whatever reason, then it will go to Auction on 5th.

    It will be bought in Auction Market at the prevailing Price. If Essaroil is not available in Auction Market ( which is highly unlikely ), then it will go to Settlement.

    In settlement, you are likely to be levied a penalty of 10 or 20 % ( not sure ) on the Last Transacted Price.

    I do belive that it will not go that level.

    Hope you will find this info, useful.

    Cheers & Good Luck
    PAKatil
     
  5. link.capit

    link.capit New Member

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    Dear friends,

    I had done short sell of 1000 shares of Some SCRIP with margin on friday and could not square off at the end of the day since the share reached its upper limit and trading was suspended for the day.I have been told by my broker that these shares will now be auctioned by Exchange and profit/loss shall be determined on the day of auction which i have been told is on the 5th day from the day of short selling of shares.

    These shares should have been automatically squared of by the broker.but now i have to pay a price if the share prices go up during the next 5 days.


    Since Mr PAKatil replied earlier in this post that buying can be done next day and shares go to auction only the 3rd day.but my broker is advicing me other wise. Please advice if i can buy the shares on monday and if there is any SEBI article or circular indicating the same then i can pursue this with my broker.

    Please advice........
     
  6. aravinthrajm

    aravinthrajm Member

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    Brokers do not allow sqr up of intraday position in cash market on the next day. If you have not sqrd off the same day then it will for sure go for auction only.

    Regarding 20% or 10% markup depends on the brokers. There are certain brokers where they pass on the profit / loss of auction to the client directly without any marking up. In this case if the auction price is lower than the selling price by the client then the client is the beneficiary. There are certain brokers where they mark up 10% or 20% inspite of the auction price. There is no clarity in this matter with most of the brokers. It is as the broker says. But if the stock is continuously on the upside circuit till auction day then there are chances that auction loss could be huge. Basically auction price is different from market price. Only brokers would be able to tell the auction price.
     

  7. yash2010

    yash2010 New Member

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    i had done a short sell of yes bank 251 and my broker is kotak securities they are saying i have to pay almost 300 per share.which is 20% higher if market open on Monday with same price.do i have to pay 20% higher amount please tell me i am knew in market.
     
  8. gd.shepherd

    gd.shepherd Member

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    I have ICICI a/c. In the short selling segment, they have mentioned clearly that they will try to square off the position by the end of the day. If for some reason, they are not able to do it the price will be Previous day's closing price + 20% mark up the next day.

    Shepherd
     
  9. jain.er

    jain.er Banned

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    how can i sell in the auctions market
     
  10. komiredi

    komiredi New Member

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    Sir,I ama trader at india infoline .com.On 21-2-2012ishorted20 piramal health shares and failed to square.Is there any penalty if I buy on 22-2.
     
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