Introduction & Problem

Hi,
I am Johny & new to Traderji.....

Problem: on 17th of June 2010, 2 days back I did a short sell of 1091 shares of RCOM and failed to cover 910 shares at the closing. I was told there will be auction of those unsettled 910 RCOM shares T + 2 that is 22nd June 2010.

While no one was sure about the loss I am gonna face, I was trying to find the answer for the penalty on web & found traderji...

My ques, I learnt through traderji that the last 3 closing prices will be taken into consideration & which ever is the highest will be fixed as the cover prices or buy price & penalty would be 20 % of the total share value i.e., around Rs.177000 (approx for 910 shares). Is my understanding correct....

Experts plzz help my understanding..... Thanks in advance

I am not fully aware of the recovery proceedures. It should be penalty on the difference, not on the price. It was really bad that your early days at the markets had to meet with this kind of an experience.

Please short in futures, the volumes you had done does not need cash market to short. Futures has lesser margin and also lesser brokerage.

What prompted you to short RCOM, it is in a clear uptrend on all timeframes. It has tanked a bit on Friday, that should be to your advantage. Anything that happens for the first time is a lesson, please learn from every lesson the markets will teach, pledge never to repeat the same and you will be on your road to success.

I don't know what is your experience in the markets, but learning before venturing into any vocation is prudent. Every problem has a solution inbuilt, it only needs our thinking to activate it.