Comment on Consequences of Short delivery - NSE/BSE

Nithin Kamath commented on 02 Jul 2014, 11:25 PM

Ahh, got it now, since you have shorted there will be a credit of the sale the next day. So assuming you had shorted 1lk worth of stocks for intraday and you were not able to cover this because of circuit up, the next day(T+1) you will get the credit of this 1lk into your trading account. To ensure that you are not able to use this credit, since it is not your money in the first place, HDFC must be blocking this amount upfront along with a little extra to cover for any additional auction cost/penalty. On T+2, you would be doing a short delivery and exchange will do the auction on T+3 when this trade will get settled with the counter party to whom you short delivered. At this point the margins will be released. This is the process followed by most banks who are also brokerages.

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