InvestorQ : Can you explain what is the meaning of terms like backwardation / Badla / Ulta Badla / Undha Badla etc?
Tisha Malhotra made post

Can you explain what is the meaning of terms like backwardation / Badla / Ulta Badla / Undha Badla etc?

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Moii Chavate answered.
2 years ago
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The payment of money charges made by a seller of shares which he borrows to deliver against his sale is called backwardation. These charges become payable only when there are more sellers who are not in a position to deliver against their sale. These charges become payable to the buyer, when the seller is not in a position to deliver the documents to the buyers who demand delivery.

What is Badla? Carrying forward of transactions from one settlement period to another without effective delivery. This is permitted only in specified securities and is done at the making up price which is usually the closing price of the last day of settlement.

Badla Charge/ Contango is the consideration or interest paid to the seller by the buyer for carrying over a transaction from one settlement period to another.

Badliwalas are the financiers who lend money to both buyers and sellers of shares when they are not able to pay or deliver.

Undha Badla and Ulta Badla are called backwardation and they are the reverse of Badla.

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