Never heard before

[trader10]

Hi friends, need ur help. Recently opened an account with Reliance Money. on 6th june did the first ever trading on Rmoney, purchased 100 shares of IFCI in a simple deliverey order. Order was executed at 48.25 and I received contract note also.

Today on sunday, 10th june i got a call from Reliance money to inform that my stocks can not be delivered to me because of "Buyer shortage". I've never heard this term and such a phenomena before. There will be a auction on 13th and I may receive my shares, otherwise my money will be refunded. They explained that this is because another trader has done short selling.....i just don't know how is it related to me. Even they are silent about compensation towards the loss to me that may happen incase I don;t get the shares.

Please throw some light.....Thanks in advance.

 

[supaTrade]

you will get the shares from the clearing corp. after the auction.

 

[bvpraveen]

During auction, who has to borne the penalty? Short seller or the actual buyer?

Thanks.
Praveen.

 

[swagat86]

During auction, who has to borne the penalty? Short seller or the actual buyer?

Thanks.
Praveen.

Seller has to bear the penalty. i dont know abt Rmoney, but once it happened with me wid ICICI. They told me an auction has happened. So ul get it one day later.

No fines borne by buyer. Only seller.

Tnx

 

[beginner_av]

Hi friends, need ur help. Recently opened an account with Reliance Money. on 6th june did the first ever trading on Rmoney, purchased 100 shares of IFCI in a simple deliverey order. Order was executed at 48.25 and I received contract note also.

Today on sunday, 10th june i got a call from Reliance money to inform that my stocks can not be delivered to me because of "Buyer shortage". I've never heard this term and such a phenomena before. There will be a auction on 13th and I may receive my shares, otherwise my money will be refunded. They explained that this is because another trader has done short selling.....i just don't know how is it related to me. Even they are silent about compensation towards the loss to me that may happen incase I don;t get the shares.

Please throw some light.....Thanks in advance.

Normal - Auctions do happen not only because theres a rotten mango, but many times sellers write wrong date, or demat no etc and their Delivery instruction forms get rejected. So yo will get it later.

Abnormal - What do you mean refund the money to you? Once the order is executed in an exchange it cant be extinguished like that. They have to buy it in auction and give the shares to you.

 

[bvpraveen]

Seller has to bear the penalty. i dont know abt Rmoney, but once it happened with me wid ICICI. They told me an auction has happened. So ul get it one day later.

No fines borne by buyer. Only seller.

Tnx

Thanks for the information. I tried to learn more about this short sell - auction - penalty stuff. With ref. to your reply in another thread :

If the order has been executed without ur shares being in the A/c u will need to go for Auction. That incurs 12% fine plus the value of shares u dont hav in ur DP a/c. Pls confirm this from ur customer service. Which broker u use ????????

1. Is the penalty % a fixed one or does it differ with each scrip and broker house?

2. Is the penalty imposed by the exchange or the broker?

3. What will happen to the penalty amount which is being charged from the seller. To whom does it go - the exchange or broker or buyer?

Thanks in advance,
Praveen.

 

[swagat86]

Thanks for the information. I tried to learn more about this short sell - auction - penalty stuff. With ref. to your reply in another thread :



1. Is the penalty % a fixed one or does it differ with each scrip and broker house?

2. Is the penalty imposed by the exchange or the broker?

3. What will happen to the penalty amount which is being charged from the seller. To whom does it go - the exchange or broker or buyer?

Thanks in advance,
Praveen.

well, to my knowlege the penalty is same for all stks, and penalty is imposed by Exchnge.

Penalty goes to exchenge of course.


and yes the value of ur shares have to be paid by the short seller to the exchange.


Thnaks

 

[bvpraveen]

Thanks swagat

 

[swagat86]

Thanks swagat

always welcome buddy

 

[jdm]

Penalty goes to exchenge of course.

Thnaks

nope, the buyer receives the penalty