Typical BSE Badla Index values pre-2000 (data reconstructed from exchange bulletins):
The word Badla stems from the Hindi word meaning "exchange," "change," or "carry forward". In financial terms, it was an indigenous deferred settlement mechanism. index of badla
When short-sellers (bears) wanted to roll over their short positions but lacked the physical shares to deliver, the tables turned. They had to pay a premium to borrow shares from stock lenders. This reverse fee was called Undha Badla or Ulta Badla (backwardation). Typical BSE Badla Index values pre-2000 (data reconstructed
The term Badla roughly translates to "change" or "carry forward" in Hindi. Developed decades before electronic trading screens, it was a specialized form of margin trading that blended elements of credit extension, stock lending, and forward contracts into a single continuous market transaction. They had to pay a premium to borrow
Badla is a type of trading system that was introduced in India in the early 20th century. Under this system, traders were allowed to buy and sell securities on margin, i.e., without paying the full amount of the transaction. The Badla system enabled traders to carry forward their positions to the next trading day, subject to certain conditions. This system was particularly popular among Indian traders, who used it to speculate on the market and make profits.