NISM Certifications · NISM-Series-VII: Securities Operations and Risk Management · Settlement Process
A clearing corporation computes a member's net obligation across trades in the same security for the same settlement. A member bought 1,000 shares of a stock at ₹200 and sold 600 shares of the same stock at ₹210 in the same settlement. What is the member's net securities obligation and the nature of net funds position for that stock?
The member receives a net 400 shares and pays net funds of ₹74,000. Purchases cost ₹2,00,000, sales bring ₹1,26,000, and netting the two obligations gives a net payable of ₹74,000 along with the net receipt of 400 shares.
- AReceive 400 shares; pay net funds of ₹74,000Correct
- BReceive 400 shares; pay net funds of ₹2,00,000
- CDeliver 400 shares; receive net funds of ₹74,000
- DReceive 1,600 shares; pay net funds of ₹74,000
Explanation
Securities: buy 1,000 less sell 600 gives net receipt of 400 shares. Funds: purchase value 1,000 x 200 = ₹2,00,000; sale value 600 x 210 = ₹1,26,000; net payment is ₹74,000. The ₹2,00,000 option ignores the sale proceeds.
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