Budliwalas

The budliwalas are the financiers operating on the securities market. They advance money by taking delivery of securities on the due date at the end of the clearing, for those who wish to carry over their purchases. They also sell securities to the market when it is short of them, by giving delivery on the due date at the end of the clearing, for those who wish to carry over their sales.

Contango and backwardation. The buyer willing to carry over the transaction has to pay the budliwala a consideration called contango. It is also known as badla charge. Similarly, the seller has to pay budla charge known as backwardation to the badliwala when the request for carry over comes from the seller. The Contango and backwardation may be paid separately or may be adjusted with the price of the securities. The badla transactions are regulated by the stock exchange and sometimes they are prohibited.