Is there any way we can know in advance there is risk of auction, so we can avoid doing BTST ? for example, checking NSE short selling report on the evening before doing BTST to see if that share has any short deliveries. NSE gives a CSV file “Short Selling” at http://www.nseindia.com/products/content/all_daily_reports.htm, if the share is not in this report, can we assume it is safe to do BTST next morning?
(short selling report for previous site is also available at http://www.nseindia.com/products/content/equities/equities/archieve_eq.htm choose report type as short selling). I see that for most dates there is no record in these report. Is it because short selling is very rare now ?
Nope. It doesnt work like that way.
You can never be sure, that the seller whom from you bought is going to default.
Its more or less a random phenomenon. If your trading qty is less, never worry about BTST.
Edit:
I think I was not clear earlier.
We cannot know about shortselling until T+2 morning. That is when we will come to know the seller whom from we bought the share has defaulted, which in turn means that we are also going to default because we have sold that shares which we cannot get, I mean we did BTST.
I guess the reports what they publish could be of shortselling which gets reported on T+2 day.
Anyway damage is already done on T+1 day, so we cannot escape.
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Thanks for answer. I never did BTST because of this auction fear. I am thinking about trying this.
There is nothing to fear trade100.
Even the penalty part is very less. Only the auction part might have impact.
That also for most liquid shares, you would get a price closer to the market. Auction market also competition will be there. Its not monopoly to fix any price they want.
Sometimes you get cheaper price in auction (when market is little down in 2 days time) which gives you some benefit.
Anyways the probability of this short selling happening is very rare.