I shorted venkys(660 shares at 1320) on the result day expecting the stock to fall a bit after big upmove. However it went further up till the upper band(1373.85). So on T+1 day, the closing price is 1352.50 which is lesser than the closing t day price. My margin was blocked at the 20% ceiling on t day price and is currently negative. I would like to know how a stock like venkys(being a midcap and has pretty good volumes on nse) might perform on the auction market? Is there a high possibility of it not being taken up in the auction market? Also should I wait till auction is completed or cover the negative margin before that?
I know it was my fault that I traded it on result date without keeping stop loss but I would like to know whether it will be traded well in the auction market so that my loss isnt huge.
Thanks in advance
The auction market price will depend on how the stock is doing on Monday. If the stock is doing well and no one sells their stock to the exchange when it conducts the auction, the closeout rate (rate at which the exchange will settle the transaction) could be 20% higher than the closing price on Monday.
For example, the closeout price on Thursday was Rs 1648.50 (i.e. 120% of 1373.85).
In any case, you will incur delayed payment charges at 0.05% per day till you make good the negative balance. So, it would be prudent to bring in the funds to avoid the charge. If there’s any excess balance after the auction, you may withdraw it as you do normally.
Thanks for the reply.
Does stock doing well imply high rate of buying like another circuit? or even normal small upside?
If the stock goes up by even 2-3%, does this negate the possibility of trading in auction?