Upstox margin slips to -40k on an intraday position.

[amateurtrader33]

Entered a short and the stock started hitting upper circuit(or so the CS at RKSV says). I kept getting notifications (Margin at -200%, position will be squared of at 80%) that the position will be squared off automatically, but it didn't execute it seems. I had to manually square it off, following which it did get executed with a huge negative in my balance. Should I seriously consider paying them back? I already lost my existing margin + profits, it seems unfair on their part that risk management systems didn't trigger an order - for me to now pay back the negative? Also can someone let me know what happens in cases like these?

 

[Newbie Day-Trader]

Entered a short and the stock started hitting upper circuit(or so the CS at RKSV says). I kept getting notifications (Margin at -200%, position will be squared of at 80%) that the position will be squared off automatically, but it didn't execute it seems. I had to manually square it off, following which it did get executed with a huge negative in my balance. Should I seriously consider paying them back? I already lost my existing margin + profits, it seems unfair on their part that risk management systems didn't trigger an order - for me to now pay back the negative? Also can someone let me know what happens in cases like these?

There was a similar case here with negative balance of 70k or something, & the trader didn't have to pay, it's a case of failure of Upstox's RMS - http://www.traderji.com/community/threads/upstox-stole-my-20-000.106386/

 

[amateurtrader33]

For clarity - I was trading equities and all of this happened in about 20 mins, I had margin of 25k + 38k in negative so overall losses of 63k. Not after recovering the margin that I had before the trade, as I entered the trade willingly and am responsible for the positive margin I lost. No much knowledge beyond what I mentioned here and above in the thread, do you guys think this is RMS failure for sure? @Newbie Day-Trader?

 

[cinderblock]

Which stock are you talking about?

If it is a smallcap and hit UC immediately and stayed there then RMS might not be able to square that position.

How were you able to buy @UC? Or was it after a while when it came out of UC

 

[amateurtrader33]

Was RCOM. I placed an order to square off and it happened after a delay of 15-20 secs as far as I remember

 

[amateurtrader33]

Is it possible that an order from RMS got executed after I manually placed the order for square off?

 

[cinderblock]

I don't see Rcom hitting UC in the charts yesterday

 

[cinderblock]

Is it possible that an order from RMS got executed after I manually placed the order for square off?

Yes, possible. Though not sure.

RMS might put have put in an order automatically and you did too.

You need to provide a snapshot of trades and orders executed yesterday for anyone to comment further.

 

[amateurtrader33]

This was a month ago. Was planning to pay it off this month, but decided to do some research bnow before jumping into it first

 

[Newbie Day-Trader]

For clarity - I was trading equities and all of this happened in about 20 mins, I had margin of 25k + 38k in negative so overall losses of 63k. Not after recovering the margin that I had before the trade, as I entered the trade willingly and am responsible for the positive margin I lost. No much knowledge beyond what I mentioned here and above in the thread, do you guys think this is RMS failure for sure? @Newbie Day-Trader?

Of course, it's an RMS failure since RMS is supposed to (although they may or mayn't be LEGALLY obligated to in any given particular case but I can't say as I'm not a lawyer) squareoff customer-positions before they reach negative balances, it's good for the customers & it's good for brokers as they don't have to pursue clients to recover negative balances. Well, if they haven't strongly pursued you by calling or taking legal action to get the money back during an entire month's time, then I don't see the problem.