Shares not delivered!!!

#1
I started trading Indian stocks few months ago. I had bought IOB few days ago and today I got an email from my broker ShareKhan that the shares cannot be delivered and that I will have to wait for 3 days for the auction to end and after that I will get either the shares or cash. Has something like this happened to anyone? Is this common? The thing that disturbs me most is that a ShareKhan rep told me today that I cannot do anything about it, cannot even put a stop order on that stock. I hate having a position in the market without a stop order.

If this is common I will probably stop trading stocks and stick to futures only. Can this happen in futures too? Experienced traders/investors can someone give me any info on this?

Thanks.

--SwingTrader
 
#2
it happenes sometimes when shares go short with the exchange and delivery cannot be maintained so they get cancelled by the exchange and the quantiy is sent to auction for redirecting it either to invetors or the exchange . In such cases investors are generally handed over the cash. so don't worry ur money is safe and u will get it. It also happened with me too.
 
#3
gold_ranjit said:
it happenes sometimes when shares go short with the exchange and delivery cannot be maintained so they get cancelled by the exchange and the quantiy is sent to auction for redirecting it either to invetors or the exchange . In such cases investors are generally handed over the cash. so don't worry ur money is safe and u will get it. It also happened with me too.
Ranjit,

Thanks for the reply. Actually, I was not worried about the money. I knew that the money was safe. I was worried about my position and it being active without a stoploss order. I never keep a position in the market without a stop order. I did receive the IOB shares after two days.

FYI: I was lucky to receive the IOB shares on time, they got stopped out yesterday. If I had not received the shares on time I would probably have lost a lot more than the 1% of my equity I had risked on the position.

Any idea if such a thing is common? It is just that this sort of thing will mess up my strategies.

--SwingTrader
 
#4
You are in trouble only if you sell the next day, If you sell after two days eg. buy on monday and sell on tuesday, then you are safe. This is because our exchange follows the T+2 settlement system and you will always get the shares delivered after the auction. Hence if you sell next day there is risk of short delivery but no such risk on +2 day and you can fill the payin obligation.

Always assume a 10% bad delivery chance if you are trading equities on delivery basis specially if the stock is in demand and high volumes.
 

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