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NISM Certifications · NISM-Series-VII: Securities Operations and Risk Management · Clearing Process

Broker A's client buys 400 shares of a company at 100 in the morning and sells 150 of the same shares at 105 in the afternoon, same day, in the cash segment (not intraday product, normal delivery). What is the net obligation for the settlement of this client in the clearing process?

The client receives a net 250 shares and pays a net Rs 24,250. Purchases of Rs 40,000 are offset by sale proceeds of Rs 15,750, and 150 shares sold reduce the 400 bought, because obligations are netted for the settlement.

  1. AReceive 250 shares and pay net funds of Rs 24,250Correct
  2. BReceive 400 shares and pay Rs 40,000
  3. CDeliver 150 shares and receive Rs 15,750
  4. DReceive 250 shares and pay Rs 40,000

Explanation

Buy value = 400 x 100 = Rs 40,000; sell value = 150 x 105 = Rs 15,750. Net shares = 400 - 150 = 250 to receive. Net funds payable = 40,000 - 15,750 = Rs 24,250. The other options ignore the netting of either securities or funds.

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