Short credit in Shares

Hello,


My broker has advised me that they have received 20 shares short against my purchase. I have been further advised that the shortage may be met by auction and shares will be credited to my account after that. As i understand that the seller must have gone to auction and some penality will be there on him.

Now my question is does the buyer get some compensation from this ammount because due to non receipt of shares he may not be able to sell for 3-4 days.
Regards

Hellow,
if the price gone up than ur buy rate then u will be paid the diffrence.

Hi,

Question is not about difference in money as the shares are going to be credited to my account but it will be late by 5-7 days and during theses days i can't do any transaction on these shares.

I was just refereeing to that. Moreover if price goes down do i have an option that i don't enforce auction the person who has gone short.

Rajeev

no compenasation

yes you will be compenseted by the seller.

normally the broker take investors for a ride in such cases due to the lack of awareness. so be ready for a fight with your broker

Dear JDM

Hello


Can you please give me the exect rule for this as this has happened in the past too with me and no compensation paid by the broker. It has again happened in the current market though the share i purchased has gone down by 2% in this carnage but that also is important. In the past too it happened that the share spiked 15% with 3 days and auction credit came to me after 10 days. By that time share was back to my buy price. Kindly enlighten with exact NSE/SEBI rule

regards
Rajeev

http://www.nseindia.com/content/nsccl/nsccl_eqsettcycle.htm

see under the head auction.

the penalty which is imposed on the seller is received by the buyer as a reward. for a buyer auction credit is always a win win situation. and this is perticularly true when the market has tanked so much as i write. remember, the exchange or the brokers acts only as an intermidiatory. but errant brokers often do not pass the auction credit to the buyer. he simply buys you the stock from the market after few days and pockets the auction credit.

Dear JDM,

Thanks
Will Discuss this with my broker
Rajeev

Normally If You Are Delivered Less Than Your Bought Quantity, There Is A Closeout For The Deficit Quantity & Thumb Rule Is That You Get Cash Credit In Your Ledger After The Closeout Which Approximately Is About 20% More Of The Prevailing Price On The Day Of Closeout.

I Don't Think There Is A Credit Of The Deficit Shares Though.

SavantGarde

Dear Savant,


Here is the message i got from the broker :-

For NSE settlement number 2008041 there is a short delivery of 20 share/s of TATAMOTORS. These shares may be received through Auction on or after 29-Feb-08. And the payout / closeout would be credited by 04-Mar-08.


Now on 4th March shares are credited to my account and nothing more. What can be method to check if i shall get something.
Rajeev