CNC to MIS conversion query

General
1

Hello,

I had bought 200 shares of a company through CNC using Zerodha Kite and after a few days I had sold these shares. Later on in the day, I noticed that the share price of that stock rose, and so I went into my positions and converted my order from CNC to MIS. Now, what I don’t understand is, what exactly does converting a sell order from CNC to MIS do? I was under the mpression that if I convert my sell position then I will be able to sell the shares for a higher price on the same day. Now it is showing that I have the same 200 shares back in my portfolio, but in open positions it is also showing that these 200 shares have been sold off. Also, my margin has reduced.

Please help.

2

Would appreciate if you could send account specific queries to [email protected]

When you convert a CNC position to MIS, the trade becomes an Intraday trade. You’ll have to square off the position before the end of the day, failing which it gets auto squared off.

The day you sold and converted it into MIS, you created a new short position in the stock. To square off your position, you had to buy back the shares. Since the price of the shares had risen from the time you squared off the position, you would have made a loss on such MIS trade which is why your margins have reduced.

This trade wouldn’t affect your Holdings in any way and it remains as it is.

3 Likes
3

See, I had sold the stock when it was 131. Then, I saw that it had risen to 137.15, at which point I converted my position from CNC to MIS, thinking that the stock would be sold at 137.15 instead of 131. I then proceeded to cancel a buy order that was placed by an admin. It finally closed at 135.20. Now I have noticed that rupees 4743 was used out of my existing margin. Also, the 200 shares have been added back to my portfolio, and my profits have also increased, and these 200 shares are still reflecting in the ‘Postions’ tab also as ‘Open Position’. I cannot wrap my head around what’s happening.

4

You’ve already sold the stock at 131 after which you’ve converted the position to MIS. So your current position is a short position. Once a trade is executed, you can’t expect to get it traded at another trade. To close the position, you will have to buy it back. Since the price has increased, you’d make a loss on such a trade.

1 Like
5

Exactly, After converting to MIS, and shorting, I had cancelled the buy order that was placed by the admin for auto square off. It was cancelled successfully. Now what happens?

6

Sir, in layman’s language I will explain you.

From holdings, if it’s from demat or BTST, next day or later anyday, if you sell some shares, you place sell request by authorising through your TPIN of CDSL or NDSL.

now when you sell by putting your desired price, order goes to pending order followed by if price touches, it shows in executed order which will reflect in position by a writeup ‘sold holding’ with negative entry. Example (-200 xyz shares, avg price 131). On same time , if you check your holding, it will show 0 qnty xyz shares.

So the above is a request to sell which broker with the help of demat authority will settle or neutralised by deducting that many shares from your store or holdings which will be executed post operation or day end.

First thing Now you change that into cnc or mis or vice-versa, it won’t make any difference on your p&l. As anything comes in position, first thing in share market, it will be considered as intraday trading.

So if incase someone will click on exit from position, it will show buy window. Or if someone will buy same number share from watchlist, automatically, it will be settled or squared off agaist the sell request number. And position entry will show 0 insted of -, and your sell request for holdings will be cancelled. Your holdings wil again show your shares that you have bought earlier with same avg price. Which means it is safe, untouched.

Please understand,what is shortsell, check YT videos. So to avoid any loss, post the - entry which is sell order, a trader need to buy at lower price then his selling price. So he/she can gain profit. Hope this has cleared your doubt.