Seeking help here. I made my first short-sell trade today.
I have just short-sell a stock today (Fri) via DBS Vickers.
Is it that I have to buy the stock within T+3 days (i.e.), next Wed, to close out my short-sell position?
Is it possible for me to not do anything and hold my short-sell position for weeks/months?
Thank you very much.
(16-06-2023, 02:35 PM)Choon Wrote: [ -> ]Seeking help here. I made my first short-sell trade today.
I have just short-sell a stock today (Fri) via DBS Vickers.
Is it that I have to buy the stock within T+3 days (i.e.), next Wed, to close out my short-sell position?
Is it possible for me to not do anything and hold my short-sell position for weeks/months?
Thank you very much.
oh oh... you better call your broker ASAP!!! :O
you will have to pay for selling something you don't have!! :O
When you cannot deliver shares SGX will initiate a buy-in for you at a special board that only those with SGX terminal can see. It will start at 2 (4?) spreads above current price and goes wider after 10 or 15min I think until someone who owns the shares currently sell to you for same day delivery.
Different exchanges have different rules for short selling. Typically you have to borrow shares to short sell and exchanges generally frowned on naked short sell. If you do it too often your broker will look for you. So no you can’t hold a naked short sell for extended period. OTC products are different story.
Thanks Brattzz, Specuvestor.
I found this online. Just sharing.
- It seems that I have about 1-and-half days to acquire from market the shares that I have short.
Problem is I do not have a broker (person) dedicated to me. So can only email the general email address to ask.
Settlement of trades executed on SGX securities market takes place on the second market day after the trade date (ie T+2). When a seller does not have sufficient shares in the account for settlement by the start of the final settlement run at 1:30pm on T+2, CDP will conduct buy-in on that afternoon*. Securities bought in successfully will be used to fulfill the seller's delivery obligation on the next business day.
The buy-in session will commence from 4pm to 5pm on T+2. If buy-in is not successful by the end of T+2, buy-in will continue from 4pm to 5pm on T+3.
The starting buy-in price for any security is 2 minimum bids above either the previous day’s closing price or any of the transacted or bid prices in one hour preceding commencement of the buy-in, whichever is higher. The buy-in bid prices will increase by 2 minimum bids from time to time throughout the day until the securities are bought in by CDP.
As the security may be bought in at different prices during the course of the buy-in session for the day, the effective buy-in price charged to the short seller will be the volume weighted-average price for the security rounded up to 5 decimals places.
CDP charges a processing fee of S$75.00 (subjected to prevailing GST) for each failed contract. A brokerage rate of 0.75% will be levied on each buy-in contract.
Hi Choon,
It is expensive to let SGX settle the short trade for you. It is better if you can ask your brokerage firm to help you to settle your open short position before settlement date. I believe that your broker would have some of those shares in hand in their "error account", which can help to offset your short trade before settlement date.
Next time if you happen to short a stock during a trading day by mistake, you can cover back your short position yourself by buying back the same quantity of the same stock before the trading day closes.
(18-06-2023, 12:39 PM)ghchua Wrote: [ -> ]Hi Choon,
It is expensive to let SGX settle the short trade for you. It is better if you can ask your brokerage firm to help you to settle your open short position before settlement date. I believe that your broker would have some of those shares in hand in their "error account", which can help to offset your short trade before settlement date.
Next time if you happen to short a stock during a trading day by mistake, you can cover back your short position yourself by buying back the same quantity of the same stock before the trading day closes.
Thank you much ghchua.
(18-06-2023, 08:35 AM)Choon Wrote: [ -> ]Thanks Brattzz, Specuvestor.
I found this online. Just sharing.
- It seems that I have about 1-and-half days to acquire from market the shares that I have short.
Problem is I do not have a broker (person) dedicated to me. So can only email the general email address to ask.
Settlement of trades executed on SGX securities market takes place on the second market day after the trade date (ie T+2). When a seller does not have sufficient shares in the account for settlement by the start of the final settlement run at 1:30pm on T+2, CDP will conduct buy-in on that afternoon*. Securities bought in successfully will be used to fulfill the seller's delivery obligation on the next business day.
The buy-in session will commence from 4pm to 5pm on T+2. If buy-in is not successful by the end of T+2, buy-in will continue from 4pm to 5pm on T+3.
The starting buy-in price for any security is 2 minimum bids above either the previous day’s closing price or any of the transacted or bid prices in one hour preceding commencement of the buy-in, whichever is higher. The buy-in bid prices will increase by 2 minimum bids from time to time throughout the day until the securities are bought in by CDP.
As the security may be bought in at different prices during the course of the buy-in session for the day, the effective buy-in price charged to the short seller will be the volume weighted-average price for the security rounded up to 5 decimals places.
CDP charges a processing fee of S$75.00 (subjected to prevailing GST) for each failed contract. A brokerage rate of 0.75% will be levied on each buy-in contract.
Shares that you acquire from the normal board will not be in time for the buy-in. Not sure nowadays if you can ask the broker to do in the buy-in board for you the next day for same day delivery, which in my memory only SGX use it