Dear All,
I was holding on 2 lots of 1560 puts of Cipla and it was finally ITM. I need to deliver 1300 shares of Cipla on Monday which I do not have. I have plenty of margin in my account, but it is all collateral against liquid funds (considered same as cash). Given that I don’t have the shares and tomorrow being a settlement holiday I can’t get the shares either, I am looking at a market auction.
Here are my queries:
- The broker will buy 1300 shares in an auction and deliver to buyer. How much will he bill me for then? The difference between the auction price and the strike price – 1560? Plus transaction charges. Correct? Please remember that I have to deliver shares and get money.
- What if Cipla price goes to 1600 in auction – so I lose 40 rupees? Is that correct. What if Cipla falls to 1500 on Monday and auction is below 1560. Given that I am holding 1560 put, will I get any kind of benefit if Cipla price goes down?
- In order to protect myself against adverse upward movements in Cipla price, would it be prudent to buy 2 future lots of Cipla tomorrow evening or Monday? Does that make any sense?
Best Regards,