Comment on Consequences of Short delivery - NSE/BSE

Sowmya H commented on 27 May 2021, 10:28 AM

Hi Team,

This post only discuss about penalty for Mr. X and the funds which broker charges Mr. X for short selling.

The actual loss is to the buyer who missed an opportunity to book profits when the stock hits upper circuit during this period from T to T+4 days.

If on the T+4 day the stock has gone to lower circuit again, then the buyer has missed opportunity for booking profits for his trade and also buyer has to bear the losses if stock starts hitting lower circuits from T+4 day.

I see one thing here in both the circumstances buyer/shorter will be penalised but broker makes profit out of this issue.

Can you please provide detailed explanation from buyer’s point of view.

Ideally decision power on this issue should lie with buyer whether to get the stocks or funds at higher valuation in case of stock hitting upper circuit.

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