Cautionary tale on physical delivery - loss of 1.6 lacs on 2 lots of Cipla

F&O
1

Dear All,

I wanted to share my experience of physical delivery and the losses incurred so that everyone is aware and does not make the same mistake.

Please read my last post on Cipla 2 lots physical delivery for the context. Long story short, I was a defaulter on Cipla 1560 put 2 lots (1300 shares) and it went into physical delivery yesterday 03 Nov 2024. My sell was at 1555, the price yesterday was at 1583, and the shares were finally bought in auction at 1663.

A rise of almost of 10%, leading to a loss of 1.4 lacs. The broker charged me another 20k in charges. I was able to hedge the position and recover about 40k, but still the loss is 1.2 lacs. On just 2 lots.

Please be careful and never wait for last week in case of physical shares. Unlike the US markets where auctions are smoother and never a difference of more than 1-2%, in our NSE anything can happen.

Just a cautionary tale. Hope it helps

2

if the client doesn’t have the required margin to buy or give shares, the position should be squared off by RMS team or automatic exit before 03:10 pm. this feature is helpful. if the person is serious he’ll have the required margin to buy or shares to give.

3

I read the other thread, but I don’t understand how this is possible.
Which broker were you using?

The margin requirements would’ve kept increasing starting E-4 days, so if you did not have the cash margin to take delivery on your ITM short put, the broker should’ve initiated a margin call and then auto square off, right? :thinking:

4

I think he had the margin available