Comment on Consequences of Short delivery - NSE/BSE

Asish commented on 04 Jul 2016, 09:01 PM

Hi Nithin,

Its really surprising to see you answering the queries on a blog that is almost 3 years old. Hats off to your patience and dedication.
I came across this blog recently, please correct me if I am wrong, lets assume somebody sold a share at Rs 80,and the upper circuit(UC) was hit at Rs 100 (~20%) leading to short delivery, and say the UC for next day(i.e T+1) was also 20% and it hit the UC again leading to the T+1 closing price to be Rs 120. Now on the auction day (T+2) the range of the auction price will be again +/-20% of T+1 closing price, so worst case scenario if the bid happens at +20% leading to buying price of Rs 144(i.e 20% of Rs 120) , then the person would incur a total loss of (144 – 80 = Rs 64) + 0.05%(lets ignore for now) . So its like around 75% as auction penalty. Is that correct ?

Thanks in advance.

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