short selling without squaring off the positions

[jajjinaka]

hi

im new to stocks.

i have short sold some shares of riil. i did not square off my position.

the next day i bought the same number of shares that i sold the previous day but with lesser price

but after two to three days i had a transaction in my account buying the same number of shares but with much higher price than that of i sold.

does buying the same number of shares the next day doesnt settle my account?

how to minimise the losses in such cases without transferring the shares to this account from other demat account?

i use india infoline?



when i called customer care he said some auctioning about the exchange etc etc
but i could not understand


can anyone help me please?

 

[docvijay4u]

When You Short Sell Stock Then That Trade MUST Be Covered On That Particular Day It Self. Otherway Round We Can Only Day Trade Short Selling But Can't Carry Short Position For Subsequent Days Like In Derivaties. If We Don't SqureOff Short Position Then Those Stocks Goes For Auction. In Simple Words If Don't Take Care Of Our Short Position Then Broker Take Care Of It And Cover Short Position On Particular Day, At Particular Time (Usually Within Week I Guess) For Whatever Price For That Particular Moment. We Don't Have Any Control Over Auction Process, Except Wait. As We Break Aggrement By Not Covering The Short On Same Day, One Have To Pay 15-20% Fine.

When We Buy Same Stock On Next Trading Day Keeping In Mind, 'I Am Covering My Short' Is A New Buy. Because If We Can't Carry Short Position How Can We Cover It On Next Day Or So?. So It's A Fresh Buy. Once We Buy We Can't Interfere With Transfer Process Of Bought Shares From Other Demat Account. What We Can Do Is Sell Them From DPSR Account In Less Than < T+2 Days(When Stock Delivery Is In Progress), If Your Broker Allows. Or Sell Them From DP Account After T+2 Days(When Stock Delivery Completed).

That Is What Little I Understood After Undergoing Auction.

Thanks.

 

[safiqahamed]

Can you be more clear on that? I can't understand fully. Please give reply since I'm in a very critical situation similar to that...

 

[Capricorn]

You have to square off short positions on the same day as they are taken.

If you don't do it your broker should do it.

If you broker does not offer auto square off it will go into auction mode.

 

[safiqahamed]

They told me it will be considered as futures. And cash will be released in t+2 days.

My confusion is will they buy the short stock on t+2nd day or just release the amount?

 

[valencia]

They told me it will be considered as futures. And cash will be released in t+2 days.

My confusion is will they buy the short stock on t+2nd day or just release the amount?

Hi,
How can it be called futures? Did you trade futures or spot market? The shares we short should be squared off the same trading day otherwise it will go for auction and the broker will square off at the market price + 20% something fine.
So, always remember to square off short positions (shares sold without you actually holding them).

Note : In ICICIDIRECT, they square off all the open position at 3pm approximately. But the brokerages are high for intraday.

Happy Trading