Comment on Consequences of Short delivery - NSE/BSE

Nithin Kamath commented on 19 Oct 2015, 09:07 AM

Niru, I give you a cheque, without waiting for it to clear, you write another cheque to your friend. My cheque bounces, what happens to the cheque you have issued? That bounces also right?
Similarly when you do BTST, you are required to deliver latest By T+2 day from when you sell in the morning. If there is an auction you get the stocks on T+3 day evening. So if you bought on MOnday and sold on Tuesday, assume the guy who sold defaulted. What you bought on monday, you will get the stock only on thursday evening (T+3 is when auction happens), but what you sold on tuesday, you need to deliver to the exchange by Thursday morning. Since you won’t have any stocks thursday morning, you end up defaulting.

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