Intraday Shortage penalty

arjunkr · #1 29th November 2007, 09:22 PM

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.

pakatil · #2 29th November 2007, 11:17 PM

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

arjunkr · #3 29th November 2007, 11:40 PM

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..?

pakatil · #4 30th November 2007, 12:38 AM

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

link.capit · #5 30th May 2009, 11:50 PM

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........

aravinthrajm · #6 31st May 2009, 03:01 PM

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.