I messed it all...i shorted 300 Educomp shares ...@ 720 .........goes higher @ 734..but i have not squared off due to some misunderstanding of time....and the bell ring...so what will happen in auction..?

1) brokerages will be charged as delivery both side ? That will alone be too much...

2) auction prices are generally higher...? So i have to bear the gap...
Other penalties...?

My margin amount is much less than the value of these shares. so it's brokers money......i m with India Infoline..

Please explain with example..anybody has gone through this....

Delivery brokerage will be charged on sell transaction.

Either an auction will happen or a close-out will happen.

If it's an internal shortage, then the broker may carry out an internal auction or close-out the position.

Each broker has different set of rules for internal shortages.

As India Infoline is a large broking house, there is a good possibility that your short position will lead to an internal shortage.

Ask your Relationship Manager about India Infoline's policy on internal shortages.

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Auction prices are generally higher than the market price on the auction day.

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I am not sure about your broker, but Kotak Securities blocks 150% margin for short deliveries.

If the shares that I haven't delivered are valued at 10000, a margin amount of 15000 will be debited from my account.

Once the shares are bought back in an auction, this 15000 is credited back to my account.

If I don't have 15000 n my account, Kotak will sell/block my demat holdings. (I am not sure if Kotak will sell or just block).

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Alchemist, you seem to be having answers to everything happening on this earth, you rock man.

I have given short-delivery a few times, in last 2 months....

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I have never done so since I never go for margin trading. In the cash segment, Geojit is totally tight so no chance of an "error" from my side in terms of short delivery.

I always have excess cash so I have made mistakes like buying more than I intended or selling shares I didn't intend to .

I had conversation with infoline RM..he said exchange will hold auction to buy these shares..and the price is 20 % higher of the close price on the auction day...that is tuesday..16th march...educomp's CMP is 735 rs...if it remains around this on Tuesday...20 % higher means..880 rs per share...that means i have to pay..160 x 340 = 54400 penalty..as i shorted @ 720 rs....I will be doomed surely....

I have an account with India Infoline. I did a short delivery transaction few months back with NIIT. The price at which the broker purchased the shares on my behalf was within the T + 3 (or T+4) day's range. There was no 20% above market price rule in my case.

I think the infoline RM has intimated you about the max probable loss you can incur.

I read this on auction settlement. Gives you a fairly idea about the process.

At some point of time all of you must have gone thru this short selling not covered thing...what's your experience. Please tell me....is the auction price is normal...or as i was told by rm..this 20 % thing ...this is too much.. What do u say...where is the money left for me now ..to do trading..and i have to wait till Tuesday for the verdict...this is killing me....

If the shortage is at exchange level, shares will surely be bought in the auction.

Educomp is a liquid stock and such shares are always available for auctions.

If the shortage is internal, India Infoline's own rules will apply.

Your relationship manager doesn't seem to know much (most relationship managers are like that).

Wait till Tuesday and you will know what happens.

Worrying about it isn't going to change anything.

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Just the apt comment about RM's; well most of them are like that only.
In the meantime you can go through this thread , to get the concepts discussed by Alchemist himself.

What was the final auction rate?

My estimate is between 760-765.

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You are almost right...auction rate was 755.86..[ and close price on prev day (monday) was 735.55 and on auction day was 773.45 that's huge jump, if that was to be the auction price ]..brkgs rates were 1% on auction price very high......anyway i lost around 12000...due to this ...now i will slow down..

Educomp is very active since 2 - 3 days..big jump in volumes... ??

I just try to follow trend in this stock......pivot points are no use here and don't have a real time charting software except infoline tt..not much knowledge of technical analysis..i doubt if they are that much useful for day trader.