Consequences of Short delivery – NSE/BSE

August 29, 2013

Traders,

T+2 Delivery

T+2 Delivery

What is Short Delivery?

Equity delivery based trading in India works on a T+2 rolling settlement cycle. What this means is that when you buy shares on, say, Monday (also called T day), you get the shares on Wednesday (T + 2 day). Similarly, if you sold the shares on Monday, you are required to give delivery of the shares on Wednesday after which you will get the proceeds from the sale (cash) to withdraw on Wednesday (T+2 day).

Let us take an example, you bought 100 shares of Reliance on Tuesday, September 3, 2013 at Rs. 800 and the seller of these 100 shares was Mr. X (although in the markets you don’t get to know who you have bought it from). On T+2, i.e., Thursday, September 5, you will get delivery of the stock to your demat account and Mr. X will get the sale proceeds equivalent to Rs. 80,000 (800*100).

But what if you had one of the following situations on hand:

1. What if you don’t have Rs.80,000 in your trading account to buy the 100 shares?

An exchange doesn’t directly interact with a client. When you as a client make a purchase of any worth, the exchange debits the money from the brokerage firm’s account that you are trading with. So if a brokerage has let you buy stocks for delivery with no money in your trading account, then the brokerage is obligated to pay for these purchases to the exchange. The broker would then recover the money from you and would also charge you an interest for the money that he has paid on your behalf to the exchange if you delay in payment.

2. What if Mr. X doesn’t have the 100 shares in his demat account, but he still sold them?

As mentioned earlier, if you sell any stock on T day, you are obligated to deliver the shares on T+2. But sometimes it may so happen that you sell some stocks but these stocks are not present in your demat account and hence you would not be able to give delivery of these stocks on T+2 and would end up defaulting. This default is called “Short Delivery“.

Now you’d be wondering how/why anyone would sell a stock and not deliver it? Well it can happen for various reasons. Here are a few common ones:

a) You sold 100 shares of Reliance for intraday expecting the price of Reliance to go down. If you sell any stock for Intraday you are expected to buy it back by the end of the day to close your position. Now assume you forgot to buy it! Now you’re left with no option but to deliver these 100 shares of Reliance on T+2. Since you don’t have any shares, you would not be able to deliver and would default, thereby causing a Short Delivery.

Now this cannot happen with your broker as Zerodha is because we let you buy/sell equities with 2 product codes: MIS (for Intraday) and CNC (for Delivery). All Intraday trades (bought/sold with the product code MIS) would automatically get squared off at 3:20 pm ensuring that even if you have not squared it off yourself the system does it for you. When you try to sell Reliance with the product code as CNC, the systems will check if you have these shares in your demat account and let you sell only if you do, thereby ensuring that there is no short delivery.

b) You sold 100 shares of Reliance at Rs.800 for intraday expecting Reliance results to be bad. However, news was out that Reliance had done exceptionally well and hence the stock went up and hit the upper circuit at Rs 880 (when a stock hits the upper circuit there are no sellers, so if you’ve short sold the stock, there is no way that you can buy it back unless it gets released from circuit. This won’t happen on a stock like Reliance but can happen on a lot of illiquid stocks that don’t trade on Futures and Options). Assuming the circuit is never released during the day, you’d be forced to hold your short position and would have to deliver the shares, failing which the shares would be short delivered.

The role of the Exchange is to ensure that if you buy shares, you get credit of the shares. Assuming you buy 100 shares of Reliance from Mr. X and if Mr. X fails to deliver these shares to the exchange on T+2, it’s quite obvious that you would not get these shares. So what happens is the exchange conducts an Auction and buys these shares for you in the Auction market and gives delivery of these shares to you on T+3 (Friday, September 6) instead of T+2.

Short delivery is the risk you take when trading BTST (Buy Today, Sell Tomorrow), read this blog for more.

What happens in an auction market?

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Auction Market

In the Auction session, the exchange invites offers from fresh sellers for quantities short delivered (100 shares of Reliance in the above case)

When does the Auction happen and who can participate in the Auction market?

It is a special market where only members of the exchange can participate as fresh sellers and sell shares which are short delivered. The Auction market is conducted every day between 2:00pm and 2:45 pm. To make sure that there is no conflict of interest, the exchange doesn’t allow the member whose client has defaulted in delivering to take part in the Auction market.

At what price are the shares sold?

There is no fixed price for the Auction to happen. The exchange specifies a range within which the auction participants can offer to sell their shares.

Upper cap of the range: 20% higher than the price that it closed on the previous day of the Auction.

Lower cap of the range: 20% lower than the price that it closed on the previous day of the Auction.

So in the Reliance example above, a fresh seller can offer to sell 100 shares of Reliance in the Auction market in the range of 664 (assuming Reliance closed at Rs.830 the next day; 20% below 830) to Rs.996 (20% above 830).

What next?

Coming back to the example, you bought 100 shares of Reliance from Mr. X at Rs.800 and Mr. X defaulted in giving you the shares. The exchange will now buy these 100 shares in the Auction market and give it to you.

Assume that in the Auction market the fresh seller is offering to sell 100 shares at Rs. 920 only. What now?

The Exchange is obligated to buy it at whatever price and give delivery of these shares to you. The Exchange would hence buy these shares at Rs.920/- and give you the shares. Since Mr. X has defaulted he would have to pay the difference of Rs. (800-920)*100 = Rs. 12000/- to the exchange. Along with this, the Exchange also charges an additional penalty of 0.05% of the value of stock per day that Mr. X failed to deliver. The sum of both the above together is called “Auction Penalty“.

So, typically, in the books of accounts of Mr. X, he would have received a credit of Rs. 80, 000 (800*100) as sale proceeds, and since he failed to deliver the debit on his account would be Rs. 92,000 (920*100) thereby resulting in a loss of Rs. 12000/- on the transaction.

Hence it is very important that you short sell a stock for delivery only if you have it in your demat account or you could lose up to 20% of the value of the stock as an Auction penalty.

The entire process:

a) On T Day Mr. X sells the stock.

b) On T+2 Mr. X fails to deliver the stock.

c) On T+2 when the shares are not delivered, the exchange blocks a sum of money from the brokerage’s account which is called “Valuation Debit”. The Valuation Debit is the closing price of the stock on the day preceding the Settlement day (basically, closing value of stock on T+1, as settlement happens on T+2).

d) On T+2, the exchange conducts the auction and purchases the stock from the auction participants on behalf of the defaulting seller.

e) On T+3, the exchange gives the shares to the buyer and sends an Auction note to the defaulting broker. The broker then passes on such auction charge to the defaulting client.

What happens if, on Auction day, the price of the stock comes down considerably? Can a client benefit in an Auction market?

An interesting scenario:

Assuming that after Mr. X sold the stock (at Rs. 800) the price of the stock dropped to Rs. 780 (on T+1). The valuation debit that would be debited from the brokerage’s account would be Rs. 78000/- (780 closing price on T+1 * 100 shares).

On T+2 the Exchange conducts the Auction and in the Auction market buys Reliance at Rs.750/-.

On T+3 when the Exchange sends the Auction note to the Broker, the price in the Auction note would be

“The higher of Valuation debit or the price at which the stock has been bought in the Auction market.”

In the above example, the Exchange would debit the brokerage’s account with a sum of Rs. 78,000 even though the stock was bought at a value of Rs.75, 000. The difference of Rs. 3000 (780-750)*100 would be transferred to the Investor Protection Fund.

If, in the Auction, the stock gets bought at Rs.850/- then the Exchange would debit an additional Rs.70 (Rs.850 – Rs.780 which was earlier blocked as Valuation Debit).

What happens if the Exchange finds no fresh sellers in the Auction market?

In such a case, the exchange settles it in cash on the basis of Close out Rate. Close out rate is the higher of the highest price of the stock from when you sell to the auction day or 20% above the closing price, on the auction day..

So in the above example, the exchange would close out the trade at Rs.960 (20% higher than 800) and Mr. X, the seller of the stock who defaulted, will have to bear the auction penalty of Rs.16000 (960-800*100).

It is a tough topic to simplify, but hopefully this clarifies your queries on “Short Delivery.” Also do read the blog on BTST(Buy Today Sell Tomorrow).

Happy Trading,

Nithin Kamath

[email protected] Zerodha, working towards breaking all barriers that I personally faced as a retail trader for over a decade. Love playing poker, basketball, and guitar. “You don't have to be a hero to accomplish great things---to compete. You can just be an ordinary chap, sufficiently motivated to reach challenging goals.” - Edmund Hillary

655 comments

  1. Chirag says:

    Tough topic really simplified…
    But, At Zerodha, no need to worry for short delivery…except BTST trade. Am I right?

    Thanks..

    • Nithin Kamath says:

      Yep,

      BTST and the other worry would be stock hitting upper circuit. For example you had short MCX for intraday, it then hit upper circuit, so you end up with short delivery.

      Cheers,

      • Anand says:

        Sir with the above example I have a query. After me buying 100 shares of Reliance at Rs. 800 and paying my broker Rs. 80,000 in time, if exchange is not able to give me back those 100 shares and has closed out the transaction at Rs. 960 say. You explained the fact that seller who defaulted will have to pay additional Rs. 16,000 as penalty so he returns Rs. 96,000 to exchange. But what will happen with me as I am a buyer who has already paid Rs. 80,000 to my broker? Will I only get Rs. 80,000 back or will I get something more? If I happen to get only Rs. 80,000 back and current share price is in the range of Rs. 950 or 960, I lose out on an opportunity to make profits as I only get back money I invested. Also my broker would have charged me brokerage on the same. What happens with the Exchange charges and brokerage I have paid?

      • Niru says:

        Understood most of it but I still don’t get this. X defaults while selling to me, so exchange will auction and make sure I get it any cost, right? So when I btst how will I default?

        Say I buy 100 shares from a defaulter on Monday so on T+2 that is Wednesday, the exchange realises this and auctions so I should have the shares by Thursday at the most.

        So say I sell it on T+1

        • Niru says:

          Understood most of it but I still don’t get this. X defaults while selling to me, so exchange will auction and make sure I get it any cost, right? So when I btst how will I default?

          Say I buy 100 shares from a defaulter on Monday so on T+2 that is Wednesday, the exchange realises this and auctions so I should have the shares by Thursday at the most.

          So say I sell it on T+1 that is Tuesday to Y then by his (Y’s) T+2 day that is Thursday the problems shouldn’t arise right? So how will I be penalised?

        • 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.

      • K.Srinivasan says:

        I bought suzlon on 9th October 2015. Delivery was short by 1250 shares. Till now (19th), I neither got those shares nor the money. I speak to your people every day, and get the same response,i.e., your 1250 shares will be credited today. But not credited on 14th, 15th, 16th and 17th. Pl help

      • Mohit Gupta says:

        I purchased 200 shares of eros on UC . I got mail from zerodha saying nse will settle trade on t+3 day , but i dont have any sign of share , zerodha support is very poor…they did not even care to call me back regarding status. Still waiting , my 5 lac rupees is stuck due to zerodha …and no one is helping!

      • venkat says:

        HI Nithin,

        Are you confirming Short delivery will not happen with Zerodha? If so, It happen in my case in delivery mode itself. Now I got a short delivery notification saying it will be either delivered by 6th June or amount will be adjusted back but the share is moving up now. Now if the remaining quantity is delivered then what could be the price, today’s price or the one made the order?

        Apart from this, I am tired of talking to the stubborn customer care who doesn’t have a clue of the bugs I reported. Some one is asking me to prove the bugs I reported earlier in the older version of kite web on the newer version. This is a silly question which no customer can accept. I tried explaining him that how can replicate it after fix is deployed to production but no success. The same person was saying Kite is beta version, then why such version is in live?

        Seems like, you don’t have proper technical/customer support team. Please sort that out first.

        Thanks
        Venkat

        • Short delivery can happen with any brokerage firm, including Zerodha. Your purchase price will remain the same, if you were short delivered. Instead of getting shares on T+2 days, you will get it on T+3 days.
          Checking on who spoke to you.

          • Pradnya says:

            I have got ‘short delivery’ mail from Zerodha on CNC trade. Would I loose money on this trade ?

            “Your purchase of XXXX was short delivered. Short delivered quantity: YY . You should have the shares delivered to your Demat account or the funds credited to your ledger (in case of non receipt of stock) by dd/mm/yyyy”

            • You won’t lose money, instead of getting the stock on T+2 day to your account, you will get it on T+3 days or cash at a price higher than your purchase price. You would have lost money if you had sold the shares at ATST/BTST.

              • Ashok says:

                Hello Nithin,

                I am a zerodha client. I am facing some issues with kite & customer service. First I got the short delivery of a stock, which I got on T+4 day(which ideally be T+3) day. Then the next day I was not able to sell the same stock. I tried in morning & noon, with no luck. I sent the screenshot with error message to support team but no satisfactory reply yet. I have incurred losses due to not able to sell. Please have someone look into this please.

                Thanks
                Ashok
                RA8289

                • Venu says:

                  Hi Ashok,
                  You had bought the shares on 29th. Ideally you would have had to receive it on 03rd October and it would show under holdings from 4th (30th – T+1, 03rd – T+2). Since they were short delivered, an email intimation was sent on 03rd and shares were credited to your account on 4th. We receive it from the Exchange on 4th mid-day and process credit to your account same day. They were showing in your holdings from 5th. We’ve verified it and there’s no delay.

              • Anuj says:

                Hi Nitin,

                My purchase of UDL shares on 19th Jan weren’t credited to my account. Didn’t received the short delivery mail.
                Received amount on 23rd (T+2) day but it was less than the original cost ( w/o considering brokerage, exchange fees etc.). Raised ticket 243308.
                The representative told that this is as per rules.
                Your replies states that buyer won’t suffer any loss.

                Can you ask someone to look into this ?

      • gurjeet says:

        HELLO SIR can i sell (ex:-vedanta ) and buy t back after 1 month after 5 to 10% loss

        • gurjeet says:

          left sharekhan and joined zerodha @ new account operating from Monday @ hyderabad @ left sharekhan due ti high brokerage charges hope earn some money with zerodha

      • finoshn says:

        Lets say I bought 2 shares of a stock. After T+2, i got the delivery and its shown in my “Holdings”. But when i tried to sell, in my “Positions” section its shown as ‘-2’. Why is it shorting? i would like to know how to sell these stocks.

      • Rajib says:

        Sir please help me .how much money you payment me . I to morrow 500 rs payment through debit card ok. But you my fund release very quickly .my bank account and pan card details total submit thank please quickly response this email possible details submit thankt

      • Nitin says:

        So this happens, I was short deliver 300 JHS Svendgaard share @priced at 71.25, which I bought for @63.4 .
        now on the Friday share price came down to @69.05 and I got 300 shares in my account on next day @68.4 .
        So the thing is all transaction from my side were CNC. Not only I Iost the opportunity to book the profits on Friday but all my profits from earlier days were wiped clean. So now I’m wondering how this is protecting a investors when I read in one of your comments that @Zerodha we don’t let the trading ration get out of hands.
        I’m fairly new to this. Please take your time to explain what exactly transpired and How on thrusday I was in +2000 now my profits became a big pile of Zerosss.

      • Shubha Bansal says:

        Sir, you discuss like a teacher. You are stock broker cum teacher.

      • Monika athwani says:

        Does the broker always gives delivery on behalf of client in case of client”s short delivery? Also wat is STBT and wat are it features?

        • No broker can’t give on behalf if there is a short delivery. STBT is when you have shares in your demat, you can sell it today and buy it back tomorrow without affecting the holdings in your demat for taxation purposes.

      • Krishna says:

        If any company is trading T segment where delivery is mandatory, can I sell those on T+2 day as I would get delivery on T+2 evening or should I sell only on T+3 as I would already have them in my account?

      • Jeevan Shetty says:

        How will one come to know that the stock has reached upper circuit .

      • Yogesh kumar says:

        I!! Oh !! It happend with me .on 13.3.2018 i did short 1500 shares of edelweiss at 266 with cover order.after 10 mins when i tried to exit the position when i was in profit there was no option to exit bcz ur server couldn’t handle heavy traffic that time and i called your customer support to exit the position but even end of the day they couldn’t sauare off it .even i mailed them too many times now i got short sell delivery .with loss of 12 k now in auction i will get penalty who is responsible for my loss?

      • Pranay Saraiwala says:

        Hi Nitin,
        Yesterday I made a short delivery since the stock hit the upper circuit.
        Do I need to buy the same shares today in order to cancel the effect or that would be taken care of automatically.

        • Matti says:

          In this case, even if you buy the stocks today, they won’t be available for delivery on T+2 as the purchase was a day later. You’d have to settle this trade via the auction market, I’m afraid.

    • Abhishek says:

      Sir,

      I have purchased share of Bombay Dyeing in CNC on 30th of Aug. This share was there in account till 4th sep .I got email from Zerodha as detailed below on 4th sep:

      Dear Abhishek Gupta,
      Your purchase of BOMDYEING-EQ was short delivered. Short delivered quantity: 100. You should have the shares delivered to your Demat account or the funds credited to your ledger (in case of non receipt of stock) by 05/09/2017.Please click here to know the consequences of Short delivery.

      I want to know if there is short delivery, it be on same or after 5 days. Further, share price is consistently increasing, so, what about profit booking and amount that i have blogged for that particular shares. I think it is very demotivating. Kindly Explain.

      • Abhishek, settlement in India happens after 2 working days. IF there are holidays in between, they are not counted. Only on the 3rd working day is when we get to know if there is a short delivery or not. You will either get shares today or will get cash settled.

        • Amit says:

          On 17th of May 2018, I short sell two shares MANALIPETC and JYOTHLAB. Today, 18th of May 2018, my account balance is (-1,09,499). I sold 1200 shares of MANALIPETC at 41.07(average) and 1484 shares of JYOTHLAB at 461.1(average). In ledge, I can see the blocked margin of 59,688.8 for MANALIPETC and 8,38,845.84 for JYOTHLAB. Today the price of JYOTHLAB is closed at 439.6 and MANALIPETC at 43.6. I am worried about my negative balance because the opening balance was 56,106.66 rupees on 17th may 2018 and now it is 1lac negative. I am not getting anything, your customer support is also not telling me the truth and not even telling me when and how my shares will settle. Please help me in this.

  2. PDonnaD says:

    How much margin do i require to short an option lot of nifty

    • Nithin Kamath says:

      It depends on which option you want to short, we have a tool SPAN calculator to calculate margins for option writing or various other f&o strategies, even before taking a trade.

      • nagesh says:

        Dear sir, I read ur articles it’s very nice, I am zerodha customer, log in id: RN066, i have quiery regarding NSE intraday., I am new to this trading field, please clarify.
        In a real time scenario: United Bank of india, Open : 27.50, My Limit: 27.55, Current Price 27.60, My Target: 27.60. I buy & sell 5000 shares same day, INTRADAY TRADING.. Is all 5000 shares will get sell on the same day @ my selling price? I see graph goes to 27.60, then again it goes 27.50, fluctuations.. Again it reaches 27.55, but never goes to 27.60, Close at: 27.55.
        My order shows pending! It doesn’t sold all 5000 shares, say only 2500 sold, remaining pending 2500.
        In this case, What steps i want to follow? Tomorrow if the market goes still down, what i need to do?
        How to recover my money? Is my understanding is correct? If wrong please please correct me.
        Presently i am using online stock simulator for practice…

        • Nagesh, when you place a selling order at the price of 27.6, it goes into the queue, there might already be orders from before which is pending before you. Orders placed before you at 27.6 has to be executed before yours is. So yeah, if you have decided to exit, it is usually best to exit at market price rather than limit.

          • Deepak says:

            My complaint is wrt to the trading session held today on my icicidirect account
            I used marginplus trading for the following sharesw:
            1. ) ABALLO (Aban offshore) Sell call for 75 shares @ Rs. 522.53 with stop loss @ Rs 540.60 @ 12:28 p.m.
            2.) SUNFAS (Sundram Fasteners) Sell call for 1000 shares @ Rs.194.52 with SLTP @RS. 204.85 @12:30 p.m.
            While trying to sqaure off at 3:14 p.m.; the system refused to accept my request to settle the deal at Rs. 515.35(ABALLO) & Rs. 190.75(SUNFAS)
            last price reflected on system till 3:45 p.m.
            I tried all possible ways of communicatimg with ICICI Securities team at local & IV mode but nobody could confirm if the settlement will be closed at the same price as mentioned above or will it be sqaured off at higher prices or at SLTP (ordered on marginplus as mandatory) ,which is anyways unacceptable given that the servers had some technical glitch.
            Therefore, request you to shed light on such issues ..
            As perNSE norms, the trading member has to close the settlement on marginplus trading on the same day or else the member has to provide for recovery of losses to the investor under the ‘settlement guarantee fund’ of NSCCL & the “Investor Protection Fund” as well.
            As per NSCCL, all such unclosed settlements & the losses passed to the consumer/client due to the failure of the trading member(I-Sec in this case) must be borne by the TM.

            Plz revert asap, Its realy unfortunate that at the time of helping out clients with resolutions & correct answers, bank representatives just fade away & refuse to pick up calls.

            your advise will really help .thanks

            • Deepak, can’t really comment without knowing the exact issue as it was with your ICICIdirect account. But generally, if there is a technical glitch, the brokerage or the exchange is not liable for the loss. A broker is liable to pay only what he has gained, so in your case you could probably get back a brokerage refund for this trade. I doubt if ICICIdirect will even give you that brokerage refund.

              • Nick Cheema says:

                “But generally, if there is a technical glitch, the brokerage or the exchange is not liable for the loss.”. Why should the trader suffer losses for a trashy trading platform provided by the broker or any other technical glitch by the exchange/ broker? No wonders why Indian markets are not growing at the expected pace. Another bummer is the heavy taxation (STT, Service Tax, Turnover charges, Stamp Charges, SEBI Charges), like seriously folks? And then the trader/investor has to pay the capital gains tax on all the trading profits? The broker/ exchange is the only one who is getting rich here. Someone with a small account can NOT make money in such an environment. Look at US markets, traders just pay brokerage and the capital gains tax.

              • APk says:

                Technical glitch in the trading mechanism of the broker and the resultant loss sufferred by the client due to such glitch is an actionable claim and the investor can file a complaint in consumer forum to seek compensation. consult your lawyer.

                • Arjun says:

                  Is it possible or Not ?

                  Even i have come in loss due software issue & customer support false answers from Zerodha client relation manager Hanan Delvi & his support team

                  Please guide me

  3. Tharun says:

    Hello,
    If i shorted some quantity of stock(equity), is there any time limit to buy back(short covering).

    • Nithin Kamath says:

      Yes Tharun,

      If you are shorting without owning stock, you need to use the product type as MIS while trading and all MIS positions get squared off at 3.20pm if you don’t buy it back before that.

      • Nikhil says:

        I sold Kushal Tradelink (BSE) and at 3:20pm, ADMIN2 (which I believe is Zerodha bot) placed buy order. But, that order shows status as “CANCELLED”, exchange order ID 1476675000026104741. Now, I don’t have any clue about how to buy those shorted shares.

        Can you guide?

    • Tharun says:

      Hi,
      What about delivery(CNC) based, does it has any time limit

    • Nithin Kamath says:

      Tharun,

      When you are selling using CNC(delivery), you will be able to sell only if you have stocks in ur demat, u will not be allowed to short sell.

      But if u sell from demat, u don’t have to buy back.

      Cheers,

  4. SUKHOI30 says:

    Dear admin,

    I am about to start with zerodha , just need to know how smooth and quick its gonna be, if i go for ” call and trade ” facility.
    I am not concerned about that additional cost of Rs 20/- , but yes about the ease and convenience.
    I would b thankful, if u could provide the link for all those no.s where we can call and place orders, and what all we are supposed to brief once we are on the call.

    • Nithin Kamath says:

      Sukhoi,

      We have over 50 member support team to make this experience smooth for you. All you need to keep handy is ZPIN(Zerodha PIN), if you don’t have it you can generate it for the first time when you call the support team by confirming all your details. This would be sent to you immediately on your mobile. From the second time you would need to just mention your client ID and ZPin.

      Cheers,

  5. Sukesh says:

    Hello,

    Very interesting article as usual. My question is:

    You have mentioned that if there are no fresh sellers in the auction market then the trade would be settled on close out rate. In such a case will the difference in the amount be the profit of the buyer of shares?

    My understanding is that in this case the buyer of these shares would not get the delivery of shares but the money would be credited to his account which would be his profit – Please confirm.

    Thanks

  6. Kamal says:

    Dear Nithin, have you had an instance where you shorted in cash and forgot to cover by end of day thereby loosing 20% ?

    • Kamal,

      At Zerodha, when you short intraday even if you forget to square off we run an auto square off feature for all MIS(intraday) orders at 3.20pm.

      So typically the only time when you short a stock you could be in trouble is if the stock hits an upper circuit. Yep in that case it could mean big trouble, has happened to me a couple of times very early in my trading career. My advice would be to not short stocks which have the habit of hitting circuits.

      Cheers,

      • Kamal says:

        Thank you for the prompt reply.

      • Wall Street Wolf Got Hunted This Time says:

        Hey Nithin,

        I experienced getting trapped in the upper circuit thing for the first time in my life yesterday (while shorting JPINFRATEC). It is a painful experience. I can’t do nothing to close my position but sit on my hands praying for the stock to tumble. 🙁

        • SRIRAM V says:

          A work-around possible provided you or your friends hold few of that scrip , sell it below UC to bring it down and Quickly try-to square off the other open position as LTP below UC now. But that depends on available takers

      • Mohit says:

        Hello nithin,

        What happens when we short the stock Via MIS and it hits lower circuit thereafter?

        • Yep, that is an issue shorting using MIS. If its lower circuit, you will short deliver.

          • Swaraj says:

            Hi Nithin,
            I have 2 queries.
            1. I had 9K amount in my trading a/c. I was allowed to buy stocks under MIS upto 9K only. I guess Zerodha allows to buy upto 3x or 10x amount. Pls confirm.
            2. Yesterday I short sold one share at X price (total traded amount was around 8.5K for 90 quantities & under category MIS. I had 9K in my trading a/c prior to that transaction), but that share reached the upper circuit in some time and hence I could not buy back that stock. Now in Kite Dashboard, my account value & margin available are showing 7K. Now I am really worried and confused. Should I deposit any money in my trading account ?
            What should be my next step for this before T+2 ?

            • 1. MIS leverage varies from stocks, check this calculator: https://zerodha.com/margin-calculator/Equity/
              2. Swaraj, unfortunately you can’t do anything. IF you have these stocks in any other demat, you can transfer it to your Zerodha demat by tomorrow. ON T+3 day, exchange will conduct an auction if there is no shares in your demat. On auction if the price at which exchange buys back is higher that where you short sold, the difference will be your loss. Until auction, margin will be blocked in your account.

              • Arpit says:

                Hi Sir,

                2nd point is sort of interesting. Only we can transfer that stock or any other person can also transfer that stock into our account.(i don’t think this will be allowed in the markets.)

  7. webd says:

    Can’t client can buy the shares on T+1 or T+2 day before auction and will be adjusted against the short delivery.

    Does only broker and exchange members have the rights to buy shares back?

    • Webd,

      If you buy on T+1 or T+2, you will not have the shares in your demat at the required time.

      So if you bought on Monday and sold on Tuesday, you have to deliver the stock on wednesday evening. Assuming you buy on tuesday you get the stock only on thursday(T+2) and if you buy on wednesday only on friday(T+2), in both the cases you will not have shares in your demat on wednesday evening.

      What is important to know is that when you buy shares it take 2 days before you get the shares, it is not immediate.

      Hope this helps,

  8. ashokchawla says:

    Hello,
    My query related to commodity. Yesterday i.e.on 29/11/13 I shorted one lot of Silver Mini in last moments without thinking that the contract is expiring on 30/11/2013, Saturday and Saturdays are non trading days for non agri. commodities. Later on I realized that a blunder has been committed from my side. Now please advice me.

  9. anoop says:

    today i shorted 950 shares of welcorp 42.8, but unfortunately it touch upper circuit (44.10) and i am in trouble,
    kindly explain a solution.broker(geojit) they can do anything??

    • Anoop, Nothing much Geojit can do in this case,
      The only thing you can try is to call your friends or family who might be holding Welcorp share in their demat and ask them to transfer it to your demat by tomorrow. You can then deliver these shares on T+2. This way you will avoid auction. You can buy these shares from the market, and give it back to the person who transfers this shares to you.

      It is a risk that runs, whenever you short the non F&O stocks.

      • Bajrang says:

        Hello Nithin,

        How can anyone transfer his/her shares to some other person’s demat account. Isn’t there a rule that you can trade only on exchanges. I am wondering that if such a case is possible when a person transfers his/her shares to another person’s account without having to do it via the stock exchange route, there will be a multitude of small size markets. Please explain.

        • You can transfer shares from one person to another, but if you do so firstly you don’t get any benefit of long term capital gain (0% tax). Whatever gain will be considered as a business. It is also a hassle to account this transfer, and this is the reason such transfers don’t really happen much. Even if it does, it is usually between the family

  10. HUSHAAM says:

    Please clarify whether can I sell future stock first using NRML and then buy after 2-3 days or before expiry? & if the same short selling is done using MIS, is it possible to convert short sell position from MIS to NRML buy position…. Does Auction penalty is levied on me in case of short selling future stock using MIS/NRML product types as asked in above 2 scenarios…

    • Hushaam,

      Futures and stocks work completely differently. When you trade on futures, there is no concept as delivery, the contract stays in your trading account until the expiry of the contract. If you are bullish you can buy and if bearish you can sell, there is nothing like auction penalty and all for futures. MIS product type is if you need additional leverage for intraday trade, otherwise always trade using NRML. Read this blog for queries on order types. Do read this blog, and if you have any further queries, do post again…

  11. jayachandran says:

    Hi Nithin

    what is the margin % u r offering for intraday trades. ie i have rs.1000 so i can buy upto 1lakh on intraday in sharekhan(10%).

    And i will open zerodha account shortly.

  12. MANJUNATH says:

    can someone please help me? am worried a hell lot that i have lost my money . my problem is i had bought 100 shares of wockhardt @ 449.75 and i dont remember if it was delivery or mis because i had sold them by mistake my query is in the contract note is shows me that i have sold it at 447.85 avg sell price and at the end of the contract note it says payment due to zerodha is 220 approx .But in the f3 option ins zerodha trader is shows me that sale of 100 wockhardt shares is complete but the price column shows no figure ie: sell price now what should i think of this? kindly help me asap please i ll be really greatful to you honestly

    Sincere thanks

    • Manjunath,

      On the order book if you place a market order the price won’t show up, if you double click on that order or if you open trade book (F8), you will be able to see the exact price at which it was executed. So yes you have a loss of 220 on this trade include all taxes and charges.

  13. rushme says:

    Why don’t we allow clients to sell shares in Auction market where exchanges buy for short deliveries? It will be a helpful addition.

  14. Aravinth says:

    How STT calculate in a short sell in Equity-intraday. On the Buy side or Sell side or on the sum of Buy & Sell? Pls. Clarify.

  15. Dilip Chandrasara says:

    Dilip,

    Very clear cut idea about short selling.
    i was searching from last today.

    thanks,

  16. Dilip Chandrasara says:

    I shorted 200 shares of national buildings ltd on 28.04.2014.
    so how i get information about buy price in auction market ?
    and what is calculation about my profit or loss status?

    • You will get this information after the auction which will happen on T+3 days, so if you sold it yesterday on 28th you should get this info on Friday May 2nd (May 1st is a holiday)

  17. ripunjayg says:

    Hi Nitin Sir,
    I shorted shares of Shashun Pharma yesterday ( May 07) and it touched upper circuit
    so when will auction takes place T+2 or T+3 .. i am little confused.. i read your previous post but still want to confirm.
    on what date i will come to know how much penality i have to bear?
    please be kind to answer.

  18. SR says:

    Hi Nithin,
    Thanks for the post.
    It appears that the risk of failed delivery or auction penalty will be more incase of intraday short selling as the stock may hit upper circuit but this risk is also there to some extent with BTST and intraday long selling (buy & sell) in case of failed deliveries. Please clarify if I am correct if yes then provide more details & stats on failed delivery transactions and frequency of happening them and any suggestions to minimize them if they happen.

    Also it appears that there is no way we can know in advance before auction or dont get any notification from exchange or broker on failed delivery so that we can cover up and it seems penalty is inevitable if we run into it.

    Note : By Failed delivery I mean in a intraday, I bought a stock and sold it but the person who sold to me have short sell them to me and could not cover up due to stock hitting upper circuit and the person to whom I sold took them for delivery.

    Thanks,

    • SR, the best way to avoid is by intraday trading only those stocks which doesn’t usually move too much or is illiquid, this way you will avoid getting on the wrong side of a circuit. Follow the same rule while trading BTST, that is the only way to avoid an auction and there is no other way to know upfront if delivery will fail.

  19. Jayant Mohite says:

    Hey nithin,
    I did intraday short selling of irvcl shares (2000) @ 24.1 which by the way was the upper circuit.today also the share had hit UC @ 26.5..i had 100 shares bought @ 46.65 in my demat.now these 100 shares were debited from my account.
    What happened to these 100 shares.
    What happens when one does not have enough money to pay for auction penalty.how does a broker firm charge their clients.
    I am very worried as i would roughly lose 30k and i dnt have this much money to pay back..what will i do.. please help..
    Regards,
    Jayant

  20. Jackie says:

    Hi Nitin SIr,

    I short sold 13800 quantity of HCL INSYS at Rs 54. Looking at huge loss, I had not courage to by the shares till 3.30pm because it had touched Rs.61 per share towards the end of the Market time. Was that a better decision/gamble?

    • Jackie, if you are trading at Zerodha and for intraday using MIS as product type, there is nothing to worry about. If you haven’t squared off your positions the system would have done it automatically. There is no risk of short delivery in this case and you don’t have to worry about any auction. But avoiding taking an action by postponing is not a very smart thing to do while trading.

  21. Manohar says:

    Hi Nithin,

    How i would have have minimised my loss

    ading Account No: 779905

    Reference: “Our letter dated 21-May-14 intimating you about Seller Shortage for trades done on 19-May-14.

    Dear Sir,

    This has reference to our letter dated 21-May-14, intimating you about Seller Shortage of 16000 share/s of “IVRCL LIMITED” transaction done by you on 19-May-14.

    As informed in our earlier letter that there was a Seller Shortage & Settlement of the said trade was deferred till Auction Settlement Date.

    On Auction day, since there was a Seller shortage, Rs.507760 (Rs.31.74 X 16000 share/s) was Debited to your Savings Account as Auction Debit for NSE Settlement No. 2014092.

    i have lost 1,50,000 as i have short sold IVRCL @ 22.65 on Monday

    • Manohar, the only way to have avoided the auction would be if you could have arranged for delivery of the IVRCL stocks on 21st May. One of the reasons why we should ensure to cover any intraday shorts and avoid trading BTST on counters where there is a lot of volatility. Hard luck, guess an expensive lesson learnt.

      • Manohar says:

        Hi Nithin, on what basis they auction my shares at the price of 31.74,Share has never been high to 31.74 from trading day to auction settlement day

  22. Manohar says:

    Hi Nithin,

    I just have one more question, what are the brokerage charges for delivery and Intraday, What is the margin i get in Intraday to traded if i have 10,000 rs

  23. Manohar says:

    Hi Nithin, HDFC Sec will send Auction settlement statement separately?, will that statement will have Auction price, could you please post the sample auction settlement if possible, Thank you

  24. anupam says:

    H Nithin, I have trading accounts with Kotak securities as well as Zerodha. Rightnow, I am not using Kotak because of higher brokerage. But, when I used to trade in Kotak, it allowed me to do BTST trading in inter-exchanges. I mean that if I bought some shares today on NSE, it will allow me to sell those shares both on NSE & BSE from next day onwards. However, Zerodha allows to sell shares on other exchange only after delivery i.e. T+3 day onwards.
    The reason I am asking this question is that I know with BTST trading there are chances of short sell but chances of short sell is same whether I sell it on NSE or BSE, it hardly makes difference.
    One more question, is there any chances of short sell on selling shares on T+2 day?

  25. Shashi says:

    Hi Nithin,

    Can I buy shares on NSE and sell them on BSE the same day? Or i have to wait for T+2 days for delivery? I was just trying to know if there is any way to exploit the arbitrage opportunities created due to difference in price on NSE and BSE.

  26. pandeyvin says:

    SirDir Sir, Yesterday i.e on 18/06/2014 I sold ‘Gati’ 1000 nos. at 129/- while I was not having delivery in my demat account. My intention was to short sell the same. But my broker did not inform me that my shares have been sold off. Today on 19/06/2014 he asked me to deliver the 1000 shares but I was not having the delivery and i was not aware that the shares have been sold off yesterday. Now today the closing price is 123.90. Now on T+2 the shares will be auctioned. Now tomorrow i.e on 20th if the price of the gati goes down the below 123.90 the exchange would take the higher valuation of 123.90. Sir, Wanted to ask in this case do get a profit of approximately 5000/-. Please correct me if I am wrong. Another question is what if the GATI closed above 129 then I have to bear a loss. Sir, your guidance is desparately needed.
    Thanks and Regards

    Vinod Pandey

    • Vinod, the auction happens on T+3 days, and there is no way to predict at what price it will happen, it could be in a 5 to 10% range of the stock price on the auction day (so if GATI is at 129, auction could happen anywhere between 129 to 150). If the price is higher yes, you have to bear the loss, and it is very unlikely that you will be able to make any money of this unless the stock falls significantly.

  27. Kabir says:

    Hey nithin, i have done intraday short selling of Kalindee rail nirman on 19may 2014 and unfortunately share touched upper circiut. coz of that i cudnt squared off and it has gone for auction and i need to mention about the loss that happened coz of auction. But the thing that i would like to mention H that HDFC securities didnt auction it, they have done internal settlement and they are having their own way of settling this thing ” 1) they will charge closing price of (T+2 + 10%)
    2) the highest price on BSe and NSe in T+2 days which ever is higher
    i really wonder, is it completely fine the way of settling this kind of trade?
    or is there anything wrong with this

    • Kabir,

      My guess is someone from HDFC gave you a wrong explanation, don’t think they can do an internal settlement and charge you more for that.

      • Kabir says:

        hello again,
        actually i asked all details of auction and when they didnt provide me they have given me explanation in this form
        In case the margin position could not be squared off for any reasons (for example, lower liquidity in the scrip, scrip hitting circuit filter, internal system issues or problems at Exchange’s end, market freezing by the Exchanges / SEBI etc.) your open position will be settled on a delivery basis.

        Similarly, for outstanding sell positions, we will first attempt to create securities holds in your linked default demat account. If the securities hold could not be placed because of a shortfall, non-availability or some other technical reason, a value equal to the short quantity multiplied by the closing price * 20% will be debited to your account. We will then try to place a funds hold on your bank account for the same. If fund holds could not be created in your bank account due to a shortfall of funds in your linked default bank account or some other technical reason, the debit balance will be displayed as negative Cash-n-Carry limits. The short position will then be either auctioned or squared off.

        and regarding the amount that they have chrged, the way of calculation that they have done is on this basis

        check out this link ..”http://www.hdfcsec.com/Compliance/201305071049497330701″

        and if you will check above conversation in this blog only…you will find one guy Manohar has mentioned short selling of IVRCl
        the mail that HDFC has sent to Manohar, same kind of mail they have sent to me
        and then i asked explanation and sheet for auction then those people has mentioned me all these things

        Kindly let me know..Is this way of settlement is according to rules??

        • 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.

  28. Kabir says:

    but the thing is they are having fixed way of charging for this kind of settlement..its not auction kind of thing. they will charge according to their own way…the way of charging is there in a link dt i ve posted http://www.hdfcsec.com/Compliance/201305071049497330701

    • Manohar says:

      Yes, I agree with you Kabir, i lost huge amount of money with IVRCL, they fix the price 31.70 which share never reached that price

      • Venu Madhav says:

        Whenever you buy shares, you are entitled to receive them from the Exchange. The Broker receives such shares from the Exchanges and credits it to the buying client. Now let’s assume clients X&Y trading with the same broker. Client X buys 100 shares of TATA Steel and client Y sells 100 shares of TATA Steel on the same day. In such case, the Exchange is not obligated to deliver any shares and the broker is required to do an internal adjustment where he debits shares from Client X’s account and credits it to Client Y’s account. Now let’s assume Client Y does not deliver the shares he sold. Such case is considered as a case of Internal Shortage.

        Now the broker can either post a penalty to Client Y and give credit of such penalty to Client X (as mentioned in the link provided by you) or buy shares on behalf of client Y and give credit of such shares to Client X.

        At Zerodha, we follow the latter as we would have to look into the interests of both the buying and selling clients and feel its unfair to penalise the selling client to the extent of 10% higher than the trading price of the scrip.

    • hmm.. tricky..will get someone from our DP team to have a look and answer.

      • Kabir says:

        apart from this, i need to know answers of few more questions like if i ll be having my account with zerodha.. Will i able to trade in stocks below Rs1, if its there then what will be the charges in that case

        • Kabir says:

          and the range for auction is [(T+2)day closing price -20%] to [(T+2)day closing price +20%] OR ITS [(T+3)day closing price -20%] to [(T+3)day closing price +20%]

          • Auction happens on T+3, so it is as of that day.

            • Jatin Goyal says:

              So far my stock market knowledge is concerned … I believe that auction is conducted on T+2 day not T+3 day. Once the same situation happened with me on motilal oswal. I received my auction bill on T+2 day itself.

              on what basis you are talking that auction will be on T+3 day? See the NSE link below.
              https://www.nseindia.com/products/content/equities/equities/exceptnl_situations.htm

              • https://www.nseindia.com/products/content/equities/equities/settlement_cycle.htm Auction settlement happens on T+3 days, but yeah auction happens same day. I will reword some of the lines above.

                NSCCL follows a T+2 rolling settlement cycle. For all trades executed on the T day, NSCCL determines the cumulative obligations of each member on the T+1 day and electronically transfers the data to Clearing Members (CMs). All trades concluded during a particular trading date are settled on a designated settlement day i.e. T+2 day. In case of short deliveries on the T+2 day in the normal segment, NSCCL conducts a buy –in auction on the T+2 day itself and the settlement for the same is completed on the T+3 day, whereas in case of W segment there is a direct close out. For arriving at the settlement day all intervening holidays, which include bank holidays, NSE holidays, Saturdays and Sundays are excluded. The settlement schedule for all the settlement types in the manner explained above is communicated to the market participants vide circular issued during the previous month.

        • Yes you can trade all stocks which is on the exchange, no additional charges for trading penny stocks.

  29. Girish says:

    Hi, I bought some shares in delivery 1-Jul-2014, which I should have gotten in my account by 3-July-2014. Due to Bad delivery, I was told by the support team (via email), it’ll be delivered on 4-Jul.

    Later on Monday (7-Jul), I was told because of a settlement, it wasn’t delivered on 4-Jul and therefore, it’ll be delivered on 7-Jul.

    My emails from 4-Jul afternoon and 7-Jul morning haven’t been responded. Even today, I’ve called twice and I was told I’ll get a call in 10-15 minutes. But no response yet.

    IT’s becoming very frustrating, to be honest, to follow-up on the same thing multiple times. Can someone look at this on priority and resolve it ?

    Thanks.

    • Venu Madhav says:

      Hi Girish,

      The stock has been credited to your account. Apologies for the delay. We are checking with IL&FS as to why the instructions failed for the credit of these shares.

      • Girish says:

        Venu, Thanks. I see the shares now.

        It will also help if the team is more responsive to emails and phone calls, especially in such situations. Just saying that “we are working on it” doesn’t convey much.

        Cheers !

  30. Bull 84 says:

    Hi Nitin,

    By mistake i sold 1500 shares of jyoti structure of value 58.60. price went down to 56.70 today. I got message saying in auction it was sold at price of 62.80.

    whats in it for me? how much losses i made,

  31. Nick Cheema says:

    This upper circuit thing is a method used by exchanges in India in order rip traders off their money. This auction thing in is not transparent at all. A trader who is stuck in Short Delivery can never know whether he is bearing genuine losses. I am so pissed off right now, I am never putting my money in Indian exchanges. This is a big slot machine.

    • Nick, risk of shorting stock without holding it with you, this kind of risk exists in most exchanges around the world. Yes, the auction process in itself is not that transparent. So advise is to never short stocks which are not in the top 100.

      • Nick Cheema says:

        In USA, I can carry the short position overnight (even for multiple days) without facing any auction penalties (even if don’t own the stocks). I just started trading in Indian Exchanges but this kind of bizarre regulations will keep traders like me away from the Indian markets.

        • Alok Kumar says:

          Hi Nick,

          I could not agree more with you. Indian Market is designed to rob traders and its really bad and sad for the traders. I am also feeling of never trading again on Indian market. But i do not have exposure on other exchanges.

          Thanks
          Alok

      • Nick Cheema says:

        @Nithin,

        Being the CEO of a brokerage firm, you can’t use certain words to best describe this situation but I definitely will. This upper circuit and auction are a type of scams used by exchanges to legally (although virtually) rip people off their money. Traders can lose upto 20% more than the closing price of stock (on day T+!) is simply a scam. No wonders why Indian stock exchanges never managed to become one of the largest exchanges in the world. Just because of these gray/ fishy practices. I am a tiny investor as compared to big boys but thousands of investors like myself also make a size able portion. Anyways, this was the last time I invested in India. Not any more. But I would like to appreciate Zerodha’s excellent customer service. I was being assisted by Kiran Kaur and she is simply an amazing employee of yours. I would score her 9.5/10 for her customer service skills.

        • Alok Kumar says:

          Nikhil , Being a rising brokerage house in India need your thought on few questions.

          1) What is the problem in letting the investor participate in the Auction who hold those equity in their account?
          2) While i understand the current format, Why can’t the Indian exchanges allow short positions for at least T+1 ?
          3) if the 2) cant be done , lets stop the shorting the shares even in intraday.

          As the shorting is allowed in intraday on cash segment. it gives a feeling there is something fishy and its designed to loot investor.

          Thanks in advance !
          Alok

          • Vishal Rana says:

            Alok , I was reading all the comments but the queries you have asked was my same concern.

            either they NSE should stop shorting for intraday or atleast give traders for T+1 Day time to squareoff .

            I lost 1.10 lakhs (inc. brokerages) in shorting marksans pharma 6000 shares @84.70 ( UC ) on 6th July 2015.

            auction settled at Rs 101.60 . (HDFC Sec)

  32. Naveen Kumar Singh says:

    Nitin… I shorted apollotyre on 5th Aug and was unable to cover.. today the share is trading low. at what rate NSE will buy the share for me and when. will it be at market rate of today (Auction day) or they have some other calculations

    • Naveen, the auction is on T+3 days, so it would be tomorrow. The rate would depend on the auction, but even if the stock has fallen down, you will most likely not get any benefit of this.

  33. DM0369-13906 says:

    I bought Gati Ltd when i was trading via NOW. Now I migrated to ZT and not able to see company name also not able to add Gati ltd in watch list. My id is DM0369-13906

  34. ramarao says:

    Hi sir,

    Very good articlel. Sir i have 1 doubt. If i short options then can i hold that trade untill expiry or should be closed that day only? Not option writing. Eg : I have 15000 cash on my account so I sold 7600 call value of 10000 first expectation of market corrects today. But market moved other side. So i dont want to square off my trade. I just want to hold that short contract untill expiry date? Is it possible. If possible how much amount i am supposed to maintain as a margin in my account?

    • Ramarao,

      This article is about when trading stocks/equity.

      If you are trading at Zerodha, you can see the margin requirement for trading options (short options) using our SPAN calculator. If you are trading using the product type as NRML and have atleast 75% of the margin that is shown on the SPAN calculator in your trading account, you will be able to hold the position overnight. If you don’t have that much, the position will be squared off.

      For example the SPAN shows around Rs 27000 to trade using NRML for shorting 7600 calls. If you have this much amount in your account, you can short and hold it till expiry.

      • ramarao says:

        My doubt clarified. Thank you very much sir for your reply.

      • Milan says:

        Hello sir,
        Suppose i shorted nifty 7000 pe at 50rs …qty 500. And if it requires margin of 50,000. And i have 51,000 in my account then i can short this. But next day market moves against me and option price goes 60rs. Now can i hold this contract ? OR again i have to check required margin ? Everyday i need to check margin ?

        • You will have to check the margin everyday. When u short options, margins can up or down daily.

          • Milan says:

            Thanks for prompt reply sir….

            still i have one doubt that if my margin is not enough, so my position will be square-off instantly ?
            let’s say at 9.30 i write some option and margin required is 50k.
            at 12:00 PM price moves against me. so my position will be on hand till 3:20 PM ?

            and Cover Order / Bracket Order ……when these tools will be available on Kite ?

            Thanks.

            • Yes, most square offs will be done by the team between 3.10pm to 3.30pm. If you don’t have enough margin to hold a position to the next day, it will be squared off at that time. Some days when market is volatile, it can be earlier as well.
              CO will be available soon, BO might take a little longer.

  35. ANKIT BAPNA says:

    Dear Sir, i have traded in Igarashi motors today and i have shorted 400 quantiies of share at aprrox 266 and hit the upper circuit at 277.5.now suppose if the share on tuesday goes down then this price will i make profit and how to calculate my loss if any loss happens.

    • Nain Cheema says:

      @Ankit, never ever short a stock when it is bullish my friend. You might make money 8 out of 10 times doing so but when you lose, you lose big (wiping out all the profits of those 8 times). I learnt it the hard way.

      • ANKIT BAPNA says:

        @ nAIN I NEVER WS TRYING TO DO THIS THING BUT IT HAPPENED .I HAVE PUT A STOP LOSS ON HIGHER SIDER BUT I WAS ALSO JUMPED..SO I HAVE NO CHANCE EITHER TO GET LOSS

        • Nain Cheema says:

          @Ankit, always use Stop- market order (and NOT a stop- Limit order) when you enter stop loss order into the trading platform. This way you don’t get trapped when the price jumps your stop loss point.

    • Ankit, the bad news is that in the auction market for a stock like this, you will most likely loose more money and even if the stock comes down don’t think you will get any benefit of this. There is no real way to calculate what the final auction settlement price could be. Be prepared for the worst, and ensure that you learn from this mistake, (don’t intraday stocks which have circuits).

  36. ANKIT BAPNA says:

    THANK YOU SIR.. FOR YOUR COMMENT..LOST AROUND 21000 RUPEES.FROM THIS TRANSACTION..SHARES GOT AUCTIONED AT 319.66.HOWEVER I WOULD LIKE TO HAVE SOME SUGEESTION FROM YOU.. I SHORTED 200 SHARES OF IGARASHI AT 271.1..THEN I TOLD MY BROKER TO PUT BUY RATE AT 269.5 BUT SHE DIDINT HEAR ME ( I CLEARLY SAID 269.5 )AND PUT THE RATE AT 265.5.WHILE PLACING THE RATE SHE SAID THAT A AM PUTTING RATE AT 265.5.NOW WHEN TTHE SHARE REACHED 269.5 I CALLED MY BROKER AND ASKER HER THAT WHETHER THE SHARE ARE BOUGHT OR NOT SHE SAID NO SIR THEN I ASKED WHAT IS THE RATE 269.6.WHEN AFTER THE TRADE HOURS WHEN I CHECKED MY TRANSACTION AND ASKED FOR AUDIO RECORDINGS THIS MISTAKE IN PUTTING RATE CAME UP.I TALKED TO HER SENIORS AFTER TWO DAYS HER SENIOR SAID THAT THE MY BROKING FIRM WILL BEAR THE LOSS DUE TO SHORT SELLING OF 200 SHARES.NOW TODAY MY BROKER SENIOR CALLED ME UP AND SAID THAT THE BROKER REPEATED THE RATE AS 265.5 AND YOU DIDT OPPOSED SO MISTAKE IS ALSO FROM YOUR END AND BROKER SO YOU HAVE TO PAY FOR HALF THE LOSSES.I CLEARY SAID I AM NOT GOING TO PAY FOR THIS LOSS.THEN HE SAID I WILL TALK TO MY SENIORS NOW TOMMOROW IS MARKET EXPIRY I AM USING THE LIMIT EQUAL TO AMOUNT OF LOSSES THAT THEY HAVE DEBITED DUE TO THE UPPER TRANSACTION .WAT SHOULD I DO.

  37. suresh2kb says:

    Thanks for sharing this great info.

    @Nithin, I have traded Punj Lloyd Limited stocks (Intraday) on tuesday (2-9-2014) & shorted 2236.

    • The price I sold was 39.25 & that day market reached its upper cut 39.65 (Trading day).
    • Next day market reached again its upper cut limit 41.55 (T+1 day)
    • Yesterday stock plunged its lower cut limit 38.85 (T+2 day)
    • Today the market again plunged & trades at 35.85 (T + 3 day)

    Based on above information, the net value should be profit. So do i end in profit or the amount will be transferred to Investor Protection Fund. I heard few brokers transfer money to the personnel rather IPF. Thanks in advance for all your effort & answers

    • Suresh, Broker can’t really pocket any money here. The credit is given to the investor protection fund. But if there has been a huge drop, you might end up in some profits as well(I think in your case you will).

  38. puneet says:

    Hi,
    I want to know when does a trader get a margin call. for instance i buy Reliance in futures mkt. I place a Normal
    order and want to hold this position overnight. I had say Rs 60,000 in my account. Now for instance i am making a loss of Rs 5000. Now for how long can i hold this position…as my balance is below the required margin for Normal order.

    thanks for ur support

    • Usually the positions get squared off when the margin in your account drops below the SPAN margin requirement. When you visit our Margin calculator, you can see something called SPAN margin, which shows you the minimum SPAN margin requirement.

      For Reliance SPAN is 19360 and Exposure 13025, total around 32655, so the maximum you can lose before your positions get squared off is 13000. We usually square off if you lose more than 70% of this exposure margin

  39. RAJESH J says:

    Hello Nithin Sir How Much of % ( STT ) Intraday 0.001 OR Delivery 0.01 Charges For NSE To BSE To NSE Intraday CASH Segment Arbitrages ?

  40. RAJESH J says:

    ok Nithin doing arbitrage on Buy NSE Sell BSE Sell NSE Buy BSE Has A Same 9 Am Up To 3.30 Pm Day 2 Different or More Scrip That is Taken Exchange To Exchange Delivery OR Intraday Arbitrage Trading ?

    • You can’t buy on one exchange and sell on the other, if it was that easy an arbitrage won’t exist. Remember that there is no easy money in the market.

      Assume Reliance on NSE 1000 and BSE 1010. You can buy 10 shares for intraday on NSE and same time sell 10 shares at 1010 on BSE. The difference is Rs 10. Assuming by 3.30pm this different didn’t reduce, in this case you have to exit both positions, and your trade could be a loss making one as well.

  41. RAJESH J says:

    Hallo Nithin I Have 10 shares CNC order Bout on NSE 1000 and Sold BSE 1010 on Same Time The difference is Rs 10 Total Volume is 20010 Delivery Bout & Sold Charge is 50 Profit is 50 Try High Volume trade How do could be a loss ?

    • When you buy CNC on NSE at 1000 and sell on BSE at 1010 .What you buy on NSE you will get into your demat account on T+2 day basis, but what you sell on BSE you have to deliver the shares on T+1 basis. This way your selling on BSE becomes a short delivery trade and you will be charged a penalty.

  42. how much the money (margin) will be blocked if the person has accidentally done short delivery and is it correct that the broker holds 150% money of the total short delivery amount.

  43. manoj says:

    so if I sell any stock on T day, Im obligated to deliver the shares on T+2.But if sell stocks that are not present in my demat account I would not be able to give delivery of these stocks on T+2 and would end up defaulting…but what if i bought the same from another exchange on T day wont i have shares delivered to me on T+2 days by the other exchange????? (can i an arbitrage even if i dont own the shares)

    • Good question Manoj, the only problem is that what you buy from the other exchange you get into your demat account only by T+2 late afternoon. What you have sold, has to be delivered latest by T+2 early morning. SO this time gap, doesn’t let you run this arbitrage.

  44. ankit bapna says:

    sir i bought some cesc share on monday sold the same on tuesday.now on wednesday i get a call by my trading company back office that the buy call didnt executed and do not sell shares of cesc i told them i have already sold that share. i want to know that who will bear this loss..

  45. ankit bapna says:

    Means should wait for the settlement day before selling the same.even if I m getting a good price to avoid the risk..is it not the liabty of trading house

  46. Hi Nithin,

    I sold NDTV at 107.7 on 15th Sep but couldnt buy back. And 16th Sep closing price approx 99. What will happen in this case. If penalty, how much. If profit, how much and if loss how much. and When will i get money in my account.

    • Manohar says:

      I guess u will be in huge loss, ur shares will go in to auction, i already faced same situation, You will be lucky if the share price goes up

  47. Hi Manohar,

    In this case share prices has go down

  48. yes it was intraday(MIS) but share price hit upper circuit

  49. chintan says:

    Hi I am chintan. I bought GSPL on 15th spet 2014.today my broker told that delivery has come short and will come tomorrow I.e a day later.I have following questions…
    1. Gspl is going ex div tomorrow18th sept(BC is 20-9-14 to 25-9-14)..will I get dividend.???
    2. Who can sell in auction market? Say today got short delivery….so exchange will buy from whom???can my broker sell my shares in that auction market without asking me as only members can participate.
    3. Who usually be the sellers in auction market.???as the members usually work for their client so how can they sell in auction market without their clients consent????

    • 1. Yes, you should get the dividend.
      2. Broker can’t sell any shares that you hold.
      3. Brokers can participate, but only with those shares that the broker personally owns. He can’t sell shares from his clients to participate in auction

  50. Ashok kumar s says:

    Hi , i am Ashok, I sold Caplipoint share on 30th september at Rs.414.85, unfortunately i am unable to buy it back. now the price has been rise to Rs. 435. so, please tell me what happened to my shares. There will be an continous holiday for five days from 2.10.2014 to 6.10.2014 . so please tell when my shares will be sold in auction whether in lose or profit. my money was debitted without any further notice.

    • Auction will be on T+3 days, so in your case it will be on the Wed 8th Oct. Also, in the auction market the shares will be bought on behalf of you and delivered to the person whom you had short sold and failed to deliver. Your money will be released I guess only on the 9th October.

      • Ashok kumar s says:

        Thanks nithin. whether i will make profit or loss. in what case i will make profit as well as lose. The whole money debited will be lost or part only lost or excess will be debited from my account. In what circumstance my money will be credited.

  51. Akash says:

    this is a novice question. how can you short sell on ztrader, i mean what’s the little procedure for that for intraday. is it “right click on the scrip and place sell order using MIS” just like what you do when buying/selling Long, the only difference being that in going Short you already don’t have the shares/haven’t bought them, or is there any different procedure, like we have to chose difft product type etc. ?
    Thanks

  52. sameer says:

    sir, i have a doubt on demat debit charges. If on a day i sell 20 shares at 11 a.m & another 20 at 1 pm then demat debit charges will be applied twice or once?? thanks before

  53. amit says:

    I have short sold srf today (29th oct.) But wasn’t able to buy because it hit upper circuit. Now in today’s statement it shows money has been debited from my account about 20 percent extra than today’s upper circuit. But no credit has been made for the money which i get from short selling.
    When am i supposed to get the short sell money and what us the max amount that will be lost? Whether it is today’s upper circuit plus 20% or tomorrow’s ending price plus 20%

    • Nick says:

      Please correct me if I am wrong but I just searched on the internet and found that there is no upper circuit limit on SRF Limited. I think there is some mistake on part of Zerodha..

      • Amit, you should get the money on T+4 day (i.e the day after the auction).

        The maximum you could lose is 20% above the closing price of stock on T+3 day. That is if the exchange can’t buy SRF in the auction market, which is the worst case scenario.

        @Nick, check this link. Click on Shortages handling under the main menu Clearing & Settlement on the left. You can read through this link.

  54. A says:

    I had a query regarding short delivery. If you fail to buy the shares the shares will be bought by exchange and settled in T+3 days. For the auction settlement the lower limit of the price is the closing price on T+1 day. So even if the auction prices are less than the closing prices I have to pay that T+1 closing price for buying the shares for delivery. The rest will be looted by the Investor Protection Fund. I understood this part.

    But is there an upper limit to the max amount I have to shell out to buy each share? I know it totally depends upon the auction price but I think there should be an upper limit to the price as well. Does anyone have any idea about this upper limit?

    • Confused if you are talking as the buyer who didn’t get the shares or as the seller who defaulted.

      If you are the buyer, you get the shares, instead of T+2 on T+3 days.

      If you are the seller who defaulted, exchange will try to buy the shares on auction, and the upper limit is 20% above the closing price of that stock on the T+3 day. Check this link.

  55. UMANG says:

    Sir, pls advise me in the following situation
    I purchased 30 stocks on Friday of scrip ( X) on Thursday and sold them on Monday. Now on Monday evening i come to know via sms that 30 stocks were recvd shot. What is the penalty i am supposed to pay though i was not aware they were short recvd.

    • Yep that is the risk of BTST, selling without taking delivery. There is not fixed penalty as such, whatever price the stock gets bought on your behalf on Auction day (which is Friday, since both Tuesday and thursday are holiday). Do read the blog post and queries above, everything explained already.

  56. chitra says:

    Hi,
    Suppose I buy shares of company A, however i get shares of company B in my demat account by broker’s mistake. Can I sell them if I am in profit? Is it legal to do so since I am anyways selling shares present in my own demat account?
    Thanks

    • Ideally you shouldn’t, best to inform the broker and have this corrected.

      • chitra says:

        This was a first time experience, i did not do what to do so I sold company B and bought shares of company A again with the sale proceeds. Now i get a message from my broker that I have shorted company B since it was not there in my demat acc and will be liable for auction. My doubt is, how did the trade get executed in the first place if shares were not there in my demat account since I had sold my holdings and had not taken margin from the broker. It should have been cancelled right? Agree that I shouldnt have sold them, but is my broker trying to play the game by saying that I have shorted?

        • Chitra, the entire equity business at the exchange works on a T+2 day basis. So what this means is that, if you buy you get the shares after T+2 days afternoon, and if you sell the shares get debited latest by T+2 day morning. This is the reason you are able to short shares in intraday even when you don’t hold shares in your demat account. As long as you buy back before the end of the day there is no issue as such.

          • chitra says:

            Yes, I do understand the settlement process. But what has happened is, the shares which had been credited to my account by mistake was reflecting in my holding till T+1 and later i guess they realized their mistake and the shares disappeared. Then i got a message that I have shorted. Without shares/money in my account how could the trade get executed? Thanks

            • Chitra, guess it is best to speak to your brokerage, but like I had said earlier, if you see shares that doesn’t belong to you, the first thing to do is to complain to the broker. It is very similar to how sometimes a bank gives wrong credit to your savings account, and then reverses it once the bank does reconciliation(a very common thing today), but that doesn’t mean that the person with the account can withdraw the extra money just because it was there.

          • chitra says:

            With Nil balance in trading account and no shares in demat account, i believe its not possible to short sell any shares either in cash or margin intraday.

      • vijay says:

        I had a similar experience which could have taken my life away.. I had pledged 46880 shares of JP associates and when i unpledged them, I saw 46880 shares of Tata motors in my account valued at 2.51 crores. Previously I had reported few bugs in Z5 to zerodha so I thought this could be one of them. I sold them off. Later looking at the value of the transaction i got scared and squared them off. To add fuel to the fire, I again sold tata motors all the shares and bought JP associates 7 lakh odd shares thinking of squaring it off by EOD but unfortunately Jp came down. So I left my position as it is. So my 46880 shares of tata motors went for auction. I sold JP shares on T+2 to meet valuation debit obligation. I had sold them at 537.5. After two days luckily it came down to 521. On the auction day, the shares were bought at 534.2, just 3.3rs below my sell price. imagine what would have happened if the shares were bought at a higher price or closed out… or what if the shares of JP came down by even a single re. I ended up with a marginal profit of a couple of thousand rupees. probably the rarest of the rare case when it comes to auction penalty. I wholeheartedly thank the zerodha team especially Mr Venu and Mr Chandra for their patience and support. I hereby take an oath today never ever to do such mistakes in life!!!. thank you zerodha!!

  57. mahantesh says:

    i tarded with margin amount for 800 lot silmic when the risk came the RMS auto square of all the lots but selling 800 lot has taken the price suddenly up by 400 points,now my account is -1,40,000 what are the penalty charges,pls guide i thing i need atlaest 1 month to repay the ledjer negative balance

  58. Madan says:

    Hi Nitin,
    May i know what are the settlement time lines for Options. Stock Option & Index Options.

    If i sell my Index Options today which i have bought yesterday. When will be my funds ready to be withdrawn.
    Thx,
    Madan

  59. Sanjay says:

    Sir if i sell shares in my account (in delivery) and buy them back ON THE SAME DAY,then for this type of trade what brokerage i will be charged? Intraday brokerage(as i bought my shares back on the same day without taking delivery) or delivery brokerage…example i have 100 shares in my account and i sold them at delivery & after selling them i squared off my position(buyed them back) ON THE SAME DAY…Then for this trade i will be charged for low brokerage-intraday (AS i did’nt took delivery) or high brokerag(delivery brokerage)…sir please answers this

  60. SP says:

    I short bhel at 282.80 and and unfortunately cant buyback it at the last moment. now it will go auction…broker tell me. t+1 day closing price is 282.10 and 2mrw (t+2) it may be below 280..so what price is taken for auction t+1 day’s closing price or t+2 ??plz help…i think i will be at huge loss, because my quantity was 1000…plz help..thanks…

    • SP, Auction actually takes place on T+3 days. Because the stock is liquid like BHEL, it shouldn’t cause you any much damage in auction penalty. But the risk you carry is that for two days you are short on BHEL, so if BHEL stock price goes up, it can cause a damage.

      • sp says:

        thanks for the valuable reply nithin….one more query is in auction to be held on t+3 days i.e. on tuesday…as in case of bhel, like u said its liquid…is the auction price will be market price on that time or something else..??..thanks bro..very helpful blog..much lesson learnt..

  61. Sidharth Kumar says:

    Hi,

    I had shorted 1800 ONGC (CO) on 2-12 at around 385.15 if I remember right.

    I expected the system to square it off at 3:20, when it was trading about a point lower; however as this did not happen I attempted to manually square it off by clicking (exit) in the order book. However, the order was rejected citing a server error (I do not remember the exact error however it was something along the lines off ‘Server is unable to take request at this time’). I hoped that since Zerodha has systems in place to avoid such scenarios it must have been squared off automatically and perhaps there was a problem displaying it on my side, and let it be.

    However yesterday, I received an e-mail from Zerodha stating that since an MIS position was not squared off my Margins have been blocked, and a similar SMS from NSDLDP informing me that there is insufficient quantity in my demat account and ‘available quantity will be delivered’ by 04-12.

    Since then I have not been able to log into my backoffice, and any attempts to reset the password fail. The Zerodha trader displays my current positions as none, despite me holding two long option positions in SBI and JSW Energy. I hope these are unrelated incidents but I would like to know how the matter of short delivery will be dealt with since at this time I can’t access any reports, and the last time I checked (yesterday) it displayed my withdrawal balance as approx. negative 8 lakhs.

    Also, despite an overall positive experience with Zerodha, such occasional bugs are both frustrating and sometimes scary. I should have ideally made about a grand in profit from my position had it been squared off at 3:20 as it should have been, but now it’s not certain at what price will my position be resolved.

    I would be grateful for some light on this matter and how Zerodha plans to avoid such complications in future and/or compensate it’s clients if they do arise.

  62. Vivek says:

    I am sorry for the really silly question.

    Just wanted to ask:

    I shorted 100 stocks on Friday
    missed to cover them by eod
    When will the auction happen?

    Do I need to have the stocks in my Demat Account on Monday to avoid Auction
    or
    Just buying them before Auction will be fine?

    • Auction will be on T+3, so Wednesday. You need to have the stocks in your demat latest by tuesday morning, failing which you will be taken to auction. If you buy them before auction, it will hit your demat on T+2, so that will not be good enough.

      • Vivek says:

        Thanks Nithin 🙂
        I was short on FRL.
        They went to Auction on Tuesday…
        I feel saved purely BY LUCK.
        The losses are minimal.
        As the exposure was not big the losses are less and FRL also didn’t appreciate before Auction.

        Learnt my Lesson.

        Sincerely
        Vivek

  63. Sukesh says:

    Hi Nithin,

    This question is in continuation with the question i had asked in Trading F&O;

    Link: http://tradingqna.com/9532/defaults-in-f%26o-trading

    Asking here as now my question is now specific to Zerodha 🙂

    So are there any cases of defaults in F&O at Zerodha? What measures have you taken in such cases?

    Thanks
    Sukesh

  64. karthik says:

    hi Nithin,
    Thanks for the wonderful short and crisp article 🙂 kindly clarify my doubts with explanation in your words…
    1.)just consider i ‘buy’ reliance share 100 qty @ Rs.800 on Monday(T day) in delivery based option. so the share will be delivered to my demat account on Wednesday(T+2) right ? if there is no short delivery from my seller side and if there was, then will be delivered to my account on Thursday(T+3) right?
    2.)ok now just consider, i ‘buy’ reliance share 100 qty @ Rs.800 on Monday(T day) in delivery based option and it shows my order got executed successfully. now coming to my question… can i able to sell those 100 shares on the same day(means monday which is T day) ? (which are currently not in my demat account but i just bought and expecting delivery on Wednesday which is T+2 day ) or i have to wait at-least for T+2 days to get delivery of the shares into my account?
    3.)ok if i bought shares in delivery based option on monday(T+day) it will reach my demat account on wednesday(T+2) morning or evening? means the share will be delivered to my demat account on the closure of trading on wednesday(T+day) ?

    thanks in advance…
    zero’rodha’

    • 1. Yep
      2. You can sell it the same day. It will be considered as an intraday trade, and there is no risk of short delivery also.
      3. Stocks are usually delivered around mid afternoon, before closure. But the risk of auction is reduced drastically if you sell on wednesday before taking delivery. Because even if someone short delivered to you, you will get it on Thursday through auction (T+3), and the shares that you sold wednesday anyways has to be given to the exchange on Friday.

      • karthik says:

        Thanks Nithin.. i didn’t expect your answer @ a short time. Anyhow just now i seen.
        here is my another question..
        if i’m buying some ‘xyz’ share 100 Qty @ Rs.20 with product code CNC(means carry and cash=delivery based) on monday(T+day) and my order got executed successfully. but later i change my mind to sell those 100 shares on the same day (monday itself) instead of carry over. so the complete(both=buy+sell) transaction will be considered an ‘Intraday or Delivery based one’? because i made the purchase with CNC code. so i’m in need to clarify?

        Thanks in advance nithin

        • I thought I just explained u this. Product type is only internal to Zerodha, as long as you buy and sell within a day, it is considered as intraday. It doesn’t matter if you use CNC or MIS.

  65. karthik says:

    oh okay.. thanks nithin.
    here is my question..
    1.) If i execute a ‘buy’ order with MIS(intra day) code and got ‘xyz’ company’s 100 qty shares @ Rs.150. And in the end of trading day, i can’t able to square off orelse i don’t want to square off that day(T day). Is it possible to take delivery ? if yes then any penalty there other than usual fee of delivery based options.
    2.)In the same above condition, what will happen or what i’ve to do if i used margin?

    That’s off Nithin,
    Thanks in Advance.

  66. Jitender kumar nagar says:

    This is all time good explanation for me because I fell in short sold

  67. Advait Shah says:

    Good explanation with example. Thanks

  68. Deepak Khetan says:

    Hi,

    I short sold a stock today unknowingly, its like I had 200 shares in my account under CNC and sold 500 shares under CNC which i need to cover within 2 days. Suppose I buy it tomorrow would it help me to save from auction.

    Can you suggest me a way out from this, I have inquired from all the people I know, non of them have the stock i have short sold.

  69. Nishant says:

    Hi,
    I short sold 15000 [email protected] on 16/02/2015(mon) and couldnt cover it as it reached upper circuit of 23.How would it now be settled and when,alos can u tell me how much i have to bear the loss

    • Nishant, there will be an auction on T+3 days, 20th Friday. It will depend on that day at what price the auction happens for these 15000 Suzlon shares then. The other option you have is to figure out if any of your friends/family has suzlon shares. IF they have, get it transferred to your demat before 18th evening.

    • Manohar says:

      You will be huge loss

    • Nick says:

      Hey Nishant,

      You never short a stock that is up so much. I am very sure your losses would be huge as hell because Suzlon went up another 16% today.

      Thanks

  70. vikas says:

    I sell 300 share @1526 on 23.2.15 nd closing price is 1536 of wockard
    bt i didnot buy.how much penalty i have to pay or can i buy on 24.2.15 or anyother way out pls tell me
    i am new
    My accont is on tradebulls

    • Vikas, ideally tradebulls should have squared off this position for you as you don’t hold these stocks in your demat. Like mentioned in the blogpost, on T+3, that is the 26th there will be an auction where these 300 shares will be bought on behalf of you and delivered to the person whom you short delivered. At what price can this auction happen at, depends on market condition on 26th. best to speak to your broker.

  71. Vikas, ideally tradebulls should have squared off this position for you as you don’t hold these stocks in your demat. Like mentioned in the blogpost, on T+3, that is the 26th there will be an auction where these 300 shares will be bought on behalf of you and delivered to the person whom you short delivered. At what price can this auction happen at, depends on market condition on 26th. Assuming that stock price remains around the same, you might end up losing 1 to 2%.

  72. Sachin Jagtap says:

    Hi,
    I want to know that suppose I want to buy (delivery) a share whose value is Rs 0.05 per share and I want to buy 2000 shares of it and I sell these shares when it reaches Rs 0.10 per share. How much Zerodha will charge for this transaction.

  73. Riswan says:

    Today (27.02.15) I bought 750 wonderla at 283fortunately I sold 1000 at 289 that means 250 short sell.. is there any way to cover my position

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  75. Jayraj says:

    Hi Team,

    If I buy a stock with MIS and don’t square off,system will auto square it after 3:20. But will there be some additional charges if system does the auto sqaure off.
    Thanks
    Jayraj

  76. Manohar says:

    Hi Nithin,

    Could you please confirm that can i buy futures under Normal Margin today and sell anytime on or before Expiry date.

    Thanks in advance for your help.

    Your help is very much Appreciated.

    Kind Regards,
    Manohar

  77. Sushil says:

    Dear Sir,

    In case of short covering, If i sell a share @ Rs. 100 by selecting product type as ‘MIS’ at 10AM,

    1) By 1 PM I wanted to buy share @ Rs. 90, to place the order for buying should I use MIS (Intraday) or CNC (Delivery) as product type?

    2) If I didn’t buy at by 3:20 I hope zerodha will buy the stock at CMP[Current Market Price]. Please comment on this

    3) At this square off time if share is reached to it’s circuit limit [even though its rarest case] What happens to the shares that I already sold? Will I get any penalty on this?

    Thanks in advance

  78. shankar.mr says:

    Hi Nithin,

    In case of short delivery, if the closing price of the stock on T + 1 day is significantly lesser than the shorted price, Mr X will still be in profit as the auction on T + 2 day considers closing price on T + 1. right?

    Thanks,
    Shankar MR

  79. pradeep says:

    Hi Nithin,

    i bougth the 40 stocks of PNB on monday @ 157.92 and sold it on thusday @ 157.2 before getting delivery
    through CNC option.
    but the price went upto to 162.2 so what will be my Buying price, its 162.2 or 157.92.
    in my postion it is showing -200rs.

    • My guess is that -Rs 200 you are seeing is the charges for your trade. As long as there was not a short delivery , you should get back 40*157.2. But if there was short delivery and since you sold before delivery, there will be an auction and you will be forced to buy shares at auction price on T+3 day. Auction price will be near the market price on thursday evening (T+3 from selling day of Tue).

  80. santosh says:

    what if i already hold shares at 850

    But even when the market has not reached a high , i would short sell it for 900

    But deliver it later in the day successfully, is this even possible

  81. Pavan says:

    Hi Nithin,
    Lets say, one has 1000 shares of X company at 80 Rs and he sells at a price of 100s (CNC option) and buys back (CNC option) on the same day at 95 Rs. So he makes 5000 Rs profit. Would it be short term capital gain or speculative trading (for tax calculation ). Thanks in advance.

  82. chirag says:

    Hi buddy,

    two days back I have purchased 1000 shares as Intraday and convert it to deliver around 2pm , next day price was up I tried to sold 1000 but could sell only 518, when I check I found that 482 shares was sold out as part of Intraday, broker told that transaction done but could not get shares, hence 482 shares squareoff occured automatic because of position open. I could not understand that how it’s possible as my transaction was successful to convert delivery. My report also appear that I have bought 1000 shares yet to recieve but finaly amount of share it appeared as 518. Broker told that seller could not provide delivery, so I would get shares + penalty or difference + penalty at T+3 days. But I did not get any notification from exchange.

    tomorrow is T+3.

    thanks
    chirag

    • Chirag this risk always exists when you sell before delivery. Since the market has fallen today, you might not loose any money on this. Exchange won’t notify you directly, the broker on T+3 will send u an auction note.

  83. ravi says:

    Hi sir,I have done short sell yesterday at Rs.1430 and closing price was Rs.1428 and today closing price was Rs.1408 .As you said Friday (tomorrow holiday) will be auction day.I want to know the auction price ?

  84. Sourav says:

    Sourav
    hello sir,
    I am doing b.com(1st year) Along with company secrataryship(cs). I have keen interest in stock trading and investing. Bt i am unable to open a dmat and trading account due to lack of documents especially my voter id and pan card. Bt i want to start trading from an early age to gain experience in market. I shall be very thankfull if u kindly help me out regarding the documents and as i am new to the field of trading, it would be a great help if you can enlighten me with some trading tips.
    Another thing i wanted to ask that is there any job scope for cs students in stock broking firm, especially yours.
    thank you
    sourav

    • Sourav, there is no getting away from minimum documents required. So you would have to go get yourself a PAN, and an address proof. Yeah, company secretary are needed for our finance department.

  85. Sourav says:

    Thank you for your reply sir. I’ll try to get my pan card and address proof as soon as possible.
    thank you.

  86. Adit says:

    Hi sir,

    Could you please clarify my stupid doubt about short delivery? In November 2013, I shorted 1000 shares of ABAN OFFSHORE at an average of 306 Rs. The stock hit the upper circuit that day. I traded with 1 lakh in my account. The stock must have been auctioned on T+3 day, and my broker deducted additional 15,000 from my linked bank account. I didn’t open my trading account for a long time. I kept thinking that all that 1.15 lakh is my loss. My doubt is whether all that money is my loss or do I have all these stocks in my short delivery and can I buy it back at the current price of 243. I hope it makes sense. Thanks in advance.

    • Adit, depends at what price the auction would have happened. You short at 306, if it was bought back at 406, then u would have lost 1000 x Rs 100 = Rs 1lk. So u would be left with no money/stock in ur account. So u need to login to your trading account or ask the broker at what price the auction happened.

  87. mennon says:

    Hi Nitin,

    Really helpful post; but I find myself in a real soup and would appreciate your help.

    Essentially, I had 100 L&T Shares; I was looking to sell them; I inadvertently made a fat finger error – sold 1000 instead and am now stuck with a massive short delivery liability. On T L&T was down .5% from my selling price; on T + 1, it’s down an additional 1%. However, I understand a failed auction would leave me with a massive liability of the highest price over the three days + a 20% penalty on top of that.

    So, I’d really, really appreciate answers to the following:
    1. This transaction was with Kotak; what are the odds that they will be able to do an internal auction and help me out?
    2. Any idea what the odds of a failed auction for something like this would be?
    3. Any clue whatsoever of what I should expect as an auction price?

    While I definitely made an error and take responsibility for it; this really seems like an obscure procedure, lacking transparency and the consequences of the ‘crime’ far outweigh it’s seriousness. Surely, an active SLBM or some such is desperately needed. Is there any solution at all, you might be able to offer?

    I called Zerodha asking to speak with you or Venu sir; but was told this wasn’t possible. Any help, ASAP would be really, really appreciated.

    Thanks

    • 1. Hmm.. don’t think they will be able to do any internal auction as such. If they as a broker on sitting on L&T stocks on their prop book, they could make good of the delivery. But don’t think it will happen. But what you need to find out from them is that how did the platform let you shortsell for 1000 when u had only 100 shares in the account. Ideally their systems should have blocked this order.
      2/3. Don’t think you have to be worried much about this, especially since L&T is like a pedigree stock. My guess is that if any impact will be minimal. Let us know once u get the auction note on what was the price at which the auction happened.

      Yep SLBM is still a few years away from becoming popular in India.

  88. mennon says:

    Thanks for your reply, Nithin. I’ve heard all sorts of versions of what may or may not happen – but your view is certainly the one I trust most. I guess I’ll find out what happened on Monday and will let you know. Striking lack of transparency all around this process.

    Also, surprised that the auction market isn’t used more aggressively by members to capitalize on arbitrage opportunities. That would seem like an obvious use; and one that would mitigate failed to deliver scenarios. Mystified by it all! But thank you very much for your insightful response.

  89. mennon says:

    Also, if you guys have a prop book with L&T on it; pls show up for the auction! And be kind 🙂 Friday is T+2.

  90. Dhananjay says:

    Suppose, I buy shares today (Monday) using CNC. Will I be able to sell them on next day (i.e. Tuesday)? Are there any risks in this transaction?

    Thanks in advance.

  91. uday kumar.S says:

    I bought hindalco share on last week but still it is not delivered into my account recently I got a mail as your order got short delivered

  92. aftab k khan says:

    Hi i buy tata shares as given below

    Buy-427 date 9-10-2015 / Buy-230 date 16-10-2015 total :- 657
    Sale-330 date 20-10-2015 Sale-100 date 21-10-2015 total:- 430

    remain-227

    1) so which one shares executed first ? old one or new one.
    2) my account in negative now,0 shares shows in holdings and account shows negative
    no funds credited in account after selling shares, it’s very frustrating when you buy shares and it’s disappears and account shows negative,
    i am using cnc for trade, whenever you update software make sure please don’t change holding
    positions and margin.

  93. Rohan says:

    Sir I’ve shorted allsec tech 1200 shares on Monday at 83.17 and on tuesday the uc continues and took the price to 98.25 on wednesday it was mahurat trading and the price went up to 5% uc and price went up at 103.05.. Will the auction consider the price on the second day or on the third day because I’ve the short delivery for last two days can u please give me a rough idea at what price I’ve to calculate my losses?

    • Rohan, auction will be end of day on T+3 day. So it will be based on closing price of that day. Very tough to figure out on stocks like these (hitting UC), on what the actual auction settlement price will be. Liquid pedigree stocks, it will be within 1% range of the T+3 day closing price

  94. PROSENJIT MONDAL says:

    sir hum 2 share buy kiya tha cnc pe .. after 2 day not showing in my profile holding . i call zerodha support but cant given positive respose. please help me.

  95. siddhesh says:

    i have shorted pipavav def share @90.20 800shares on 24th dec 2015 shall i get profit ??

    • Venu says:

      Its extremely rare that an Auction results in a benefit. Depends on how the stock price has moved after you’ve shorted. If it was a short delivery, your broker should have already posted the auction on your account by now.

  96. Abhishek says:

    Hi Venu
    i had 93 short deliveries of yes bank today was t 3 day i did not get any update.please let me know the status.

    my id is da1601

  97. DR4079 says:

    Hi Nitin,

    I have some queries related to linking between CNC and MIS stocks at Zerodha. can you please help to answer.

    1. Is it possible to do a Short Sale (MIS) of a particular symbol, even when holding a CNC stocks of the same, without affecting the CNC holdings?
    2. If my short sale is defaulted in above case, will my CNC stocks be used for compensating the MIS deficit?

  98. Satyabrata Pal says:

    Sir,
    I have short sell 15 Marksans Pharma on dated 19/01/2016 and I have sufficient money for Buying 15 Nos Marksan Pharma. What can I do?

    (ii) And how can buy? In Android app.

  99. Satyabrata Pal says:

    Sir
    In which date I can buy to complete the position?

  100. Satyabrata Pal says:

    Sir
    In which date I can buy to complete the position?
    (ii) If I buy today before 2 PM in CNC it will be round off?

    • You can’t buy it back to cover it. Do read the blogpost above. Exchange will buy it on your behalf on T+3 day and deliver it to the buyer whom you defaulted. Whatever is the difference in your shorting to the auction price, it will be deducted from your account.

  101. Satyabrata Pal says:

    Sir,
    I want to transfer all of holding share from my SBI Demat account to existing Zerodha demat without closing SBI Demat. What is the procedure and what is the charges from SBI and your side?

  102. Satyabrata Pal says:

    Sir,
    Reply not complete. Request intimate the procedure how I transfer all of holding share from my SBI Demat account to existing Zerodha demat without closing SBI Demat.

    • Venu says:

      When you opened your demat account with SBI, you would have got a DIS (Delivery Instruction Slip) booklet. Its similar to a check leaf. You have to fill in details of the shares that you wish to transfer & your Zerodha Demat account number in the DIS Slip and submit it to SBI who will initiate a transfer and move securities to your Zerodha Demat. Charges are applied by SBI for making the transfer.

  103. Bhavani says:

    Please have a look at this ticket #972259.

    It’s regarding my positions, the avg price of my positions have changed and is showing a loss which is NOT CORRECT.
    I want my positions revised showing the correct amount of profits ASAP.

  104. Suresh says:

    Hi,
    This is reg the short selling and auction.
    I had bought 3000 shares from NSE and by mistake sold it to BSE – ON THE SAME DAY
    Now I got intimation for auction from BSE for 3000 shares as it was a shortage.
    Will I have to lose 20% as penalty ? Is there any immediete work around that I can do?

    • It is not really a penalty, it is essentially the auction price at which exchanges buy back the stock on your behalf. Depending on what price exchange is able to buy this 3000 shares on your behalf in auction, the difference amount (your buying price – auction price) is charged as penalty. If an auction is already done, nothing much you can do now.

  105. Sadab ahamad says:

    Plz help me I am a new invested I have 32 ptl for long time but now it is not my account where it is plz help me

  106. Mathes says:

    Mr. Nithin Kamath,

    I bought 400 shares of Ambuja Cements on 26th April and when I checked my account today on 2nd May, ie on T+4, the shares are not in my account. When I sent a mail to Zerodha Support, they replied it is short delivery and went for auction. Was it not supposed to be automatically taken up by Zerodha on T+2? Suppose if I didnt take up today and checked only after a week, still Zerodha would not have done anything on their own to deliver my stocks for which I paid on 26th April? Very strange and a big let up for a new client like me. Any justification for this?

    My Client ID is RM4027.

  107. Mathes says:

    Suppose if the share falls on T+5 and I still dont have the shares to sell, do I hv any avenue to demand compensation for the losses I incurred for no fault of mine? Mind you, Zerodha should have delivered on atleast T+3.

  108. SANATH says:

    Hello sir,

    can u pls explane me clearly about intraday and delivery i am new here

    regards,,

  109. Shashank says:

    Hi..very informative article for new investors like me….I have a query…i mistakenly short 1000 x voltas at 298.5 on 03 May and unfortunately cant buyback it at the last moment. now it will go into auction…can any idea be given about my loss and also pls tell me the auction day for this trade…plz help…i think i will be at huge loss, because my quantity was 1000…plz help..thanks…

  110. Akhilesh says:

    Hello,

    I am new to Zerodha.
    I have few questions: –

    1. Do we have the buy option of margin trade with t+2/3/5 or similar format? If yes, how to use it?

    2. Can I sell the stocks without owning them and instead of getting them squared off the same day, wait for T+3/5 days for the square off?

    regards,
    Akhilesh

  111. Vivek says:

    You need to worry, even if its Zerodha.
    My positions were not closing at 3:20pm and it was around 3:22pm. I started closing my position at market rate. It was BO. Without placing any further order through order window I ended up with short position of around 800 shares. It was horrifying as I got to know through a call from Zerodha. This was my first experience with such situation.
    It can be avoided by simply closing all position before 3:15pm or letting it happen automatically. Or else consequences can be bad in terms of penalty.
    I really like Zerodha and it will be my brokerage firm always. I simply wish I knew it beforehand.
    Happy trading.

  112. Chirag says:

    I have bought 20 shares of all cargo logistics on 31 may but same has not been credited even after t+3 and even my money has not been refunded to me that’s too unprofessional on the part of Zerodha.Please sort this problem out at the earliest.

  113. Venkat says:

    Question about Short delivery.
    I bought some shares of GOACARBON-EQ on 9/6 (yesterday) and the shares are visible under holdings and even I tried to sell today. However, I got a mail few minutes back saying the shares are short delivered and I should get wither the shares / money by 13th. My questions is if the shares are short delivered, why are they appeared as holding stocks? and what happens if they are sold today by me? will I be the defaulter?

    • Venu says:

      The settlement cycle in India is T+2 which means on T+2 you get credit of these shares on your demat account. To discount the possibility of missing out on any opportunity to make gains, we allow our clients to sell such stock even before the actual delivery of stock has happened which is why they appear under your holdings with a tag called “T1”. If you sell such shares and there’s subsequent short delivery, you’ll be considered defaulter for having sold it without taking actual delivery. This is a risk that comes with doing BTST (Buy today, Sell tomorrow) transactions. More has been explained on this link here: http://zerodha.com/z-connect/queries/stock-and-fo-queries/btstatst-buyacquire-today-sell-tomorrow

  114. PRADEEP says:

    sir ..i bought 100 shares of SBI and sold one share on the same day after sometime in CNC. will it result in SHORT DELIVERY,

  115. Subhajit Sarkar says:

    I bought say 100 shares on Monday. It is showing in my Holdings as T+1 (inter-settlement condition) on Tuesday; I sold it on Tuesday morning and bought it back on the same day evening (quantity is same). So I am a net buyer, right? Today it T+3, Thursday and now I am not having it in my Holdings. What is the situation Can you explain? Furthermore, in the above mentioned scenario can I get any info on which day the “short delivery” have taken place?

    • Venu says:

      The trade you made on Tuesday will be considered an Intraday trade and your 100 shares from Monday’s purchase will continue to show under T1 holdings till it gets delivered to your demat account.

      Would help if you could give us the stock name so we could check and revert.

  116. Shreyas says:

    My account had 100 shares. By mistake I told my broker to sell 600. He sells 600 and later informs me that I did not have 600 shares and there is short delivery. Isn’t it the brokers fault that he didn’t check my account before selling? What’s the purpose of a broker if he is this careless? Is it my liability or his?

  117. Naeem says:

    Sir, on 15th June I purchased 8 SBI NCDs at 11000 but have 50000 cash in my trading acct, later on T+2 day (17th) as one of my family member was hospitalised, I forgot abt the trade obligation resulting in 38000/ shortage. On 20th I moved 45000/ to my trading account, but still NCDs not credited to my DPaccount.
    No response from the broker, I want to know usually, what % charged as penalty in such cases and why the NCDs not credited still ?

    • Venu says:

      You’ll have to get in touch with your broker and figure out Naeem. We wouldn’t know what kind of settlement he’s following. At Zerodha, if you had purchased these units, then we wouldn’t have allowed you to withdraw any money since the money would have been used. You can contact the broker and tell him to credit the NCD’s to your account and settle the obligation out of the credit balance available.

  118. Asish says:

    Hi Nithin,

    Its really surprising to see you answering the queries on a blog that is almost 3 years old. Hats off to your patience and dedication.
    I came across this blog recently, please correct me if I am wrong, lets assume somebody sold a share at Rs 80,and the upper circuit(UC) was hit at Rs 100 (~20%) leading to short delivery, and say the UC for next day(i.e T+1) was also 20% and it hit the UC again leading to the T+1 closing price to be Rs 120. Now on the auction day (T+2) the range of the auction price will be again +/-20% of T+1 closing price, so worst case scenario if the bid happens at +20% leading to buying price of Rs 144(i.e 20% of Rs 120) , then the person would incur a total loss of (144 – 80 = Rs 64) + 0.05%(lets ignore for now) . So its like around 75% as auction penalty. Is that correct ?

    Thanks in advance.

  119. Tanmay says:

    So in the case of short delivery buyer never benefits 😛 and seller always loses. Can I sell the share on T+2 in case of short delivery or only on the third day?

  120. Tanmay says:

    In case of short delivery, if there are no sellers for the shares. What amount is credited to my account? 20% higher, close price?

  121. gulzamakhan says:

    Sir if I buy today equity delivery share of Maharashtra scooter at 1320 on 19/07/16 and sold it at 1430 on the same day i.e. 19 July 2016 so is it called short selling and whether I would have to give give its delivery on 21 July, kindly reply me I am your account holder of Zerodha account.

  122. dan_xyz says:

    I bought delivery of Store one 2600 shares at 205 (excl taxe and brokerage) but am credited with 2596 shares and for the shortfall of 4 shares I am credited with cash at 205.08 per share. Is this price not less than the 20% that NSE has suggested. the closing price of Store on from T – T3 were bet 194-202.

  123. Jagan says:

    Is it possible to track short delivered stocks. Can we have page in zerodha where we can see the list of short delivered stocks(date, qty, stock) and action been taken( amount credited or short delivered stock been purchased) for the short delivery. Presently we are getting email on regarding this, which is bit difficult to track. /holdings API in Kite also doesn’t provide the short delivered stock qty information.

  124. Murali Krishna says:

    Hi Nithin Sir,

    On 20july2016 short sold [email protected] Anant Raj company shares after few minutes share got locked in upper circuit @56.45. due to no seller 58,700 deducted from my account on the same day. and
    on 22july2016 2,80,000 deducted ( total 3,38,700 – Being margin blocked for sale of ANANTRAJ ).
    Closing price was 62.75.

    Sir how much possible penalty will be imposed?
    Will I get shares of Anant Raj or rest of the amount after penalty?
    Please help me to understand.

  125. Philip says:

    T 0 stock price closing at 69.15,
    T 1 stock price closing at 72.6,
    T 2 stock price closing at 76.2,
    T 3 stock price closing at 80.05.
    Above is a UC case.
    Since I have not got delivery ( short delivery). 20 percent of which price I am eligible to get credited to my account? Is It T3 plus 20 percent as cash settlement? Any risk for future LC to buyer (me)….

  126. Philip says:

    Is a contract note a guarantee of share delivery?

  127. Gautam says:

    1) is it possible to short sell in equity delivery??
    2) I am learning stock market should i wait to learn completely or should i start investing??
    3) Which book do u suggest me to study, ( i dont know many things about stock market)
    4) How do u find Good stock in among, that you feel it would give u profit??
    waiting for answer
    🙂 🙂

  128. NareshS says:

    So if I have a view that Stock price is currently trading @ Rs 1000, and its likely to fall to Rs 900/- after a week/month/year, there is no way of me earning in this scenario by selling today at Rs 1000 and buying it after a week/month/year at Rs900?
    I need to buy it latest by 3:20pm today it self or it will automatic squared off…is it?

  129. Andy says:

    Hi,
    I have short sell a share and it went to UC. Margin statement showing that entire amount is debited. What will happen next. Does it mean, entire money is lost. I am worried. happen to me first time so not sure.

    • Venu says:

      Margins get blocked since you would have received extra credit on account of having sold shares you don’t own. On the auction day, auction amount will get debited and the blocked margins will get reversed.

  130. ajit says:

    sir, i’m buy [email protected] 14/09/2016. and today not show in my a/c … please help me

  131. suresh kumar sharma says:

    issue reg.short delivery has been well explained and it help new investors

  132. Siddharth says:

    I have received email stating,

    Dear ,
    Your purchase of INDIAN ACRYLICS LTD was short delivered. Short delivered quantity: 500. You should have the shares delivered to your Demat account or the funds credited to your ledger (in case of non receipt of stock) by 22/09/2016. Please click here to know the consequences of Short delivery.

    What does this mean? I have bought these shares on delivery basis.

  133. Hardik Pokal says:

    what is the reason that we can’t do intraday(buy and sell share on same) day for IPO on listing day/same day?
    (Note: we didn’t get IPO)

  134. Rakesh kumar says:

    Thank u sir.
    27/9/2016, this happening with me. i sold vivimed [email protected] & take upper circuit in intraday & ther is no seller so waiting for what happening.

  135. Goblin says:

    So, If I sell some shares that I hold in my Demat account. Do I need to do anything extra to make them available for delivery (besides not selling more shares than I own) or does the trading software of the broker takes care of things for me automatically?

  136. Dip patel says:

    I have confusion in DP charges. If i bought one share at 100 rupees in CNC and sell it aftet one week. here my profit is around 9.4 after tax . i want to know that what is the dp charges scenario in this trade. Is there charge of 13 ruppes ? Is i am in lose of 3.6 ruppes?

  137. Dip patel says:

    You should list dp charges at the zerodha brokerage calculatior for the CNC because new trader like i who learn stock market by dealing with too much low quanyity(hardly 1 or 2)never get details about this charges at the time of buying and finaly end up with loss at the time of selling. So please list this charges at brokerage calculator.

  138. Dip patel says:

    Thanks for reply. Please tell me about turnover charges because there is some ambiguity on zerodha charges page regarding turnover charges.

  139. Ashish says:

    What if I buy a stock on monday in cnc and sell that on tuesday. By the end of the wednesday the stock does not come into my account so can I buy that same stock on thursay morning in intraday and then give it to prevent myself from auction penalty

    • Venu says:

      No. Stocks are settled on T+2 as per the settlement cycle. When you buy stocks on Thursday, you ll receive them on T+2 and hence auction can’t be avoided.

      • Ashish says:

        But intraday doesn’t take t+2 days to the best of my knowledge!
        Can anyone else help out.

        • Venu says:

          When you sell stock, you’ve to give actual delivery of shares. When you sold the shares on Tuesday, you ll have to give delivery of such shared by Thursday. If you buy shares on Thursday, they get delivered on Monday, so you can’t settle these against shares sold on Tuesday. Shares sold on Tuesday can’t be intraday adjusted by buying shares on Thursday.

  140. MOTILAL SINGH says:

    sir, i am use kite web. i purchase share from BSE but i want sell i always show rejected why?

  141. Nayab says:

    Please clarify this problem because my friend facing this….
    Let us consider he sold 180 shares of Tata metaliks for Rs.411 (411*180=Rs.73980) and cant buy because it stop at Rs.464.. ans sayes only selling today

    After two days he got message that he bought 180 shares for Rs.615.24
    That means (615.24*180=110743)
    110743-73980=Rs.36763
    In that case he have only Rs.8000 in his account
    And he have to pay nearly Rs.28763

    How much time he will get to pay that money or
    What will happen if he doesn’t pay that money till for 6 months or 1 year….

    Will they take action against him or will they wipe out money from his personal bank account???

    Please clarify this to me because l know this problem is facing many peoples and dont know what will happen

  142. MANISH SABNANI says:

    HELLO SIR,

    FIRSTLY Sorry for asking such silly question.

    I had bought PNB (35 Shares) at 137.30 on 23 November (Wednesday). using CnC, and sold them on 25 November (Friday) at 139.50. In the evening of 25th, i got mail from zerodha saying that there is short quantity of 20.

    Also when i looked at CDSL holding, it is showing only 15 quantity and not 35. Why?

    All i want to ask is that, whether am about to face auction. ?????? help me , am new to it.

    • Manish, what this means is that, the person who sold you shares defaulted. So instead of 35 shares, you got only 15 shares. Exchanges will conduct auction on 28th (since 26th/27th is sat/sun) and give you those 20 shares. Since you sold the shares on 25th and not 24th, there is no auction risk. If you had sold it on 24th, yeah, you would have defaulted on giving 20 shares to the person you sold to.

      • Manish Sabnani says:

        Thank you sir for your earliest reply.

        Could you please tell me , when that amount of sale can be withdrawn?. I had sold it on 25th, as stated above. But the withdrawal balance is not yet including the amount of sale.
        Please, tell me the time ususally taken for crediting the amount of sale, when sold using delivery stock.

        In my case brokerage had been charged as 0.01 rs. For taking the delivery and again 0.01 for selling it off. Whereas, zerodha quotes that delivery charges are flat 0.

        Albeit, 0.01 is indeed very trivial. But i just wanted to be sure of this, whether it just 0 or not. Is everything okay with my account. Help.

  143. Arpit says:

    I shorted some share at 15.85 and then it reached circuit on that day at 16.02 and next day it also reached circuit at 19.22 so what can be my maximum loss here. And one more thing we would love to have in Kite is to have some fundamental details of company and sector wise data and some filter criteria for stocks.

  144. Sawan ghetia says:

    I bought and sold Tmrl on same day in trade to trade segment(t2t) 100 shares @224 now share is on lower circuit, hw much penalty i have to pay??

  145. Manoj says:

    Thanks sir, for this awesome blog. Please sorry for this stupid question. (1) If I bought idea cellular 100 share @72.05 under cnc delivery. And sell them on the same day at 100*73. Is there any way for short delivery.
    (2) In mis intraday trading, is there chance for short delivery.

    I am new on this. Please reply.
    Thanks sir…..

    • Venu says:

      1. No, since it’s an Intraday trade, there’s no risk of short delivery.
      2. Yes, if you short sell and the stock hits circuit, you’ll not be able to buy it back. In such cases, the stock gets short delivered.

      • Manoj says:

        Thanks for quick reply.
        In 2nd question, I mean if we buy stock for intraday trading under margin i.e (MIS) at 10a.m, and we sold this stock before closing market then, Is there is any way for short delivery.
        But in actually it is intraday trading. And according to your 1st answer, there is no risk. BUT Why In 2nd Question????
        Sir, I am Novice. I need some help. Your blog gives me huge knowledge. I am thankful to you.
        Thanks in advance

  146. Kamesh dubey says:

    Sir, by mistake today i sold [email protected] of lt food. can you tell me how penalty should be covered from me…
    is there any positive sign to avoid this penalty

    • Venu says:

      Which broker are you trading with? If you’ve sold, then you’ve to deliver the shares else it’s liable for auction and the penalty will get posted. No way to avoid.

  147. Vikash Kushwaha says:

    Sir
    myself vikash.
    I had purchased 100 shares of JKLAKSHMI on friday 30th Dec 2016 and sold on Monday 2nd Jan 2017. I guess this could be a case of short delivery however I have a question regarding credit of funds that was from sell proceeds. Same amount was not credited and showing negative balance in my trading account. In this case when my funds will get credited?
    Hope for solution.
    Thanking you.

  148. sourav says:

    Hi Nitin ,
    I got one mail from Zerodha..
    “Dear Sourav Pramanik,
    Your purchase of ADHUNIKIND-EQ was short delivered. Short delivered quantity: 1. You should have the shares delivered to your Demat account or the funds credited to your ledger (in case of non receipt of stock) by 12/01/2017.Please click here to know the consequences of Short delivery. “..
    So what should be my action tomorrow .Pls suggest ..
    Thanks
    Sourav

  149. Sandeep Tiwari says:

    HI Team,

    Today I have purchased a share (PMC Fincorp) in CNC at 0.47 and Sell it today only at 0.49. After which I come to know the concept of short delivery. Please help me, I am worried about it.

    Do I have to face any legal Penalty?

    Thanks,
    Sandeep

  150. Syamala Pankajakshan says:

    Hi

    I received a short delivery notification from you for Kajaria ceremaic 25 shares purchased in CNC. The notification says it is due to insufficient margin? How come it possible if we we buy in CNC ? Could you please clarify.

    Regards
    Pankaj

  151. Michael says:

    Hi Mr Kamath,

    I recently opened a trading A/c with zerodha, i am trying add some low priced stocks on my watch list, but once i add them it shows only 0 values & 0 increase & decrease & i cannot buy those cheap stocks. Can you please tell me what is the issue?

    Thanks In advance

  152. Chandrasekar R says:

    Hi Friends,
    I have a basic doubt… can someone please clarify?

    I have accumulated 60 shares of company X at an average price of 820. I sold the same today at 960. And i bought an equal amount when it went down to 945. Now my questions are:

    1) Will my DP reflect a debit and a credit of the above shares (or)
    2) will this trade be treated just as a day-trade, meaning no changes to my DP..

    Can someone kindly clarify this?

    Regards,
    Chandrasekar R

  153. dharmesh says:

    hi sir
    i sold the sun tv in intrady in margin base but i forgot that share buy in intraday so can you tell me how much the penlty I take it plz reply me

  154. Aritra Sarkar says:

    Sir,
    Yesterday (06.02.17) i sold 100 shares of Ludlow Jute at CNC. But i was not able to buy it back as my account was showing margin exceeded. Please tell me what i have to do? What happened to the fund?

  155. DV0662 says:

    I bought Ashiana Shares 150 quantity on Feb 1 using CNC. It should be delivered be Feb 3 EOD. But i sold the shares on Feb 3 (It shows T1:150) in my holding, and i got the message that the stock is Short Delivered.

    Please clarify what’s the impact (do i need to pay any penalty) for the same.

    • Yeah, since the person who sold you the stock didn’t deliver, you in turn will no default on delivering the 150 u bought. What happens when short delivery is explained in the post above.

  156. Mehamood lal says:

    Hi nithin,

    Is there short delivery and penalty in future and option , since there is no delivery??

  157. RAKESH says:

    1)i don’t understand, how is it possible to not get stocks if i’ve put a buy order. How is it even possible? The exchange runs on strict rules, right? so, if i place a buy order it’s the responsibility of the exchange to give me stocks on T+2 day.

    2) “If you sell any stock for Intraday you are expected to buy it back by the end of the day to close your position. Now assume you forgot to buy it!”
    How can i forget to buy it?…it’s intraday right, so all positions are squared off by the end of the day. so with zerodha this is not possible. so, please remove this from point a (which is one of the reasons why stocks don’t get delivered after an order – short delivery.)

    3) when a stock hits the upper circuit there are no sellers,………..i don’t understand this, if there were no sellers how would the stock even go up, because for the stock to go up it has to be bought heavily, right and for it to be bought, there must be people selling it, right……….i don’t understand short delivery.
    can someone please answer all three questions. Please be explanatory as i am a newbie.

    • Hey Rakesh, I have explained all of this in the post above.

      2. Not every broker runs intraday square offs like we do. Some of them give the onus on the client to do it. There could also be technical problems when squareoffs at brokers don’t work. There are many offline brokers who allow people to sell first and then ask them to transfer using DIS slip next day.

      1. All the reasons above make it impossible for exchanges to determine if you will get the share on T+2 or not. Look at this like exchange is a bank, and you are a person who has written a cheque and given tosomeone based on the money you think you will receive from a cheque deposited in your account. If the cheque you have deposited bounces, your cheque will automatically bounce.

      3. Hmm… a stock could be trading normally and if some good news suddenly comes out, stock can hit upper circuit instantly. Suggest you to read this post as well.

  158. Anivesh says:

    Sold intraday short, share hit upper circuit with no sellers, Zerodha sold the stock automatically at day close, what will happen?

    • If you are short intraday and stock hits upper circuit, you will end up short delivering. Your short will get covered by the exchange in the auction market on T+3 as explained in the post above.

  159. Yuvaraj says:

    Hi Nithin,

    I bought NCDs few days back but was later informed of short delivery. I have been refunded the old amount plus the excess amount from the auction which means I have profited from this transaction. I am an investor (do not trade) so under what category should I treat this income? Since it is a debt instrument and ST gain I guess it will be applied at 30% slab rate as my total income will be in that slab.

    Am I right?

    Regards,
    Yuvaraj

  160. Subhankar says:

    HI Nithin,

    I have two questions,

    1. If I buy in a intraday trading and forget to sell it in the same day and trading platform do not have automatic square off. what will happen ?(assuming I have enough balance in trading account for buying it)

    2. If I do a short shell of 100 of EQx in intradday trading and it hits the upper circuit and could not buy back but in my demat account I already have 100 of EQx… will it be still a short delivery for me or those 100 shares from my account will be delivered to buyer?

    Regards,
    Subhankar

  161. Fouzia says:

    Sir
    Yesterday i bought some stock as Cash and Carry, and the stock is transferred to my demat account on the same day. today i sold that stock, but that money is not credited to my Kite account till now. Will it take sometime to get fund transferred from my demat to my Kite account.

    regards
    Fouzia

    • When you sell shares the money can be withdrawn only after two days. Exchange settlement in India takes T+2 days. But for selling stocks, you should have gotten credit that allows you to buy more.

  162. vijaykra65 says:

    Hi,

    If there are no sellers on auction day too, how cash settlement happens?
    will it be settled with latest price of share (i.e., on T+3 day closing) or purchase price??

    • Venu says:

      In such a case, the exchange settles it in cash on the basis of Close out Rate. Close out rate is the highest price of the stock from when you sell to the Auction day or 20%, whichever is higher.

      In the case where there are no sellers available in the Auction market, the Exchange settles it by way of a cash credit on the basis of the ‘Close out’ rate. Close out rate is the higher of the highest price of the stock from when you sell to the auction day or 20% above the closing price, on the auction day.

      • vijaykra65 says:

        thanks for the reply.

        Recently one of the shares which i have bought were short delivered and i got a email from zerodha that cash/shares will be delivered on T+3

        On T+3, i haven’t received the shares and now, i would like to know how much money i got from exchanges, how can i find that?

  163. VIJAY KUMAR says:

    Dear Sir

    I Have purchased Sundaram Clayton 1 share on 2nd March 2017 in BSE & further
    purchased Sundaram Clayton 10 shares on 15 th march 2017 in BSE &
    sold Sundaram Clayton 11 shares on 16 th march 2017 in BSE

    You have send me mail on 17th march 2017 that Sundaram Clayton 10 shares which was purchased on 15th march 2017 was short delivered.

    1. As a client how will i come to know that the delivery was short delivered & u delivered the quantity in auction on T+3 day ie 20th March 2017 & u made auction for sell qty of 10 shares which i sold on 16th march 2017.You have said to me bear the loss in auction.

    2.Moreover i purchased further 75 shares on same day on which i sold 11 shares then how come u made the auction.

    3.Till now you have not have sended the auction note which you have told when i contacted over telephonic conversation.Why you have not sended the auction note till today 22nd march 2017 though u have said auction was made on 20 th march 2017.

    • Venu says:

      Hi Vijay,
      There’s an inherent risk with doing BTST transactions. When you sell stocks, without taking delivery, you run the risk of auction. That’s why it’s best to take delivery and sell. Here’s more info on this: http://zerodha.com/z-connect/queries/stock-and-fo-queries/btstatst-buyacquire-today-sell-tomorrow
      The contract notes were sent, we’ll have it resent to you.

      • VIJAY KUMAR says:

        Dear Sir,

        If it is according what you say then i want to know why the delivery charges has not been debited to account for 1 share ie [1 holding on 2nd march 2017+10 i purchased on 15th march 2017(short delivery)] .I sold share on 16 th march 11 shares not 10 shares . As per you only 10 shares went as BTST .Then why delivery charges is not debited in my account.

        The fact is delivery charges is not made since i purchased 75 shares on the same day when i sold 11 shares.Though it is different segment delivery goes for all T+2 days.

        Now dont debit the delivery charges in my account backdated & send me the ledger sir.

        It is really painful to debit appx Rs 3500 auction charges to my account when there is no mistake from my side.

        Please consider from the angle of retail investor & reverse the auction charges .

        Kindly oblige & do needful .

        Regards

        VIJAY KUMAR

        • Venu says:

          Dear Sir,
          DP charges of Rs.15.53 has already been charged on your account towards the 1 share that was debited from your demat account. You may verify this on your ledger. Also your purchase of 75 shares was on a different Exchange; which can’t be adjusted against the sale made on a different Exchange. Trading on 2 different Exchanges creates 2 independent positions, positions aren’t netted off.

  164. Chander says:

    Hi Nithin,

    I have few queries related to stock future trading.
    1) In any case, can the situation of short delivery occur in stock future of mid or far month contract, weather I am long or short in the contract?
    2) At what price my order will be executed, If I place a BUY or SELL MARKET order of future contract on LTP basis?
    3) I am unable to find Spread Order option in Pi. Is it disabled now, If yes then please suggest any alternate or how soon we can get this back live.

    Thanks & regards,
    Chander

  165. Aniruddha says:

    I bought CNC ALBKeq yesterday before 3:20 and sold it today morning for 7rs profit then after a while I cancelled the CNC order to sell ALBK eq. and now it is showing in positions…but then in orderbook it shows cancelled… i am incurring losses for something i didnt order. what is the matter ? can anyone help?

    • The day you buy or sell stocks from holdings, it shows up in positions. Ignore that, by end of the day it will go away from holdings. The reason it shows in positions is if you are an intraday trader and want to sell/buy that back again.

  166. Abhilash says:

    Hi Nithin,

    I come to know about Short Delivery after this article. My queries,

    1. If I choose MIS, if anything happen the position will be squared off @ 3:20 PM right ? ( we don’t need to worry about this penalty ), right ?

    2. Instead of choosing MIS , I take CNC option and doing the BUY and SELL on the same day many times, Scalping. ( May be I am fresher and not aware of MIS and CNC ). On this scenario still I have to face the same Problem by paying Penalty ?

    3. Buy on T-Day, Sell on T+3 rd day on CNC segment , is this the only option to be safe from Short Delivery and Penalty problem? what if we see a good profit on T-2 Day before delivery to DMAT account, can’t we sell ?

    4. Is the same applicable for MCX NRML delivery ( I mean doing a trade on same day without taking Delivery but choosing NRML )?

    Thanks in advance

    • 1. Yes it will be squared off. But assume a stock hit upper circuit, if it does, you will not be able to square off your short positions. So there is always a risk.

      2. You can trade using CNC without risk. But to buy you will need 100% cash, and to short you will need to have stocks in your demat.

      3. Yes, to be completely safe. Wait for delivery to your demat and then sell.

      4. In MCX there is only futures and options trading. There is no concept of short delivery on F&O. You can trade F&O intraday or overnight without any risk.

  167. sknair111yo says:

    hey there…got this msg from zerodha on 29 mar 2017
    ” Dear Shree Kumar Nair,
    Your purchase of CIMMCO-EQ was short delivered. Short delivered quantity: 660. You should have the shares delivered to your Demat account or the funds credited to your ledger (in case of non receipt of stock) by 30/03/2017.Please click here to know the consequences of Short delivery.”
    the purchase was done on 24 mar 17 ( client ID PS8597 )
    what happens next??

  168. Arjun says:

    Is there a way that in Zerodha’s demat account – there are 100 shares of a stock lying from 100 investors, and at point of time not more than 20 stocks from 20 investors are bought and sold from the inventory. Is it possible to short lets say 5 stocks out of those 100 shares and carry it on for more than T+2 days at a premium the broker.

  169. Robin kumar says:

    Sir
    Suppose I buy a lot for intra day future . May I sell it any time or only at the end of market time?

  170. Kiran says:

    I have opened my demat account long back ago may be done with two years. But I didn’t do any trading with my account. My query is can I get back my money which I have deposited.

  171. Varun kumar upadhyay says:

    hi! Sir.My client ID is RV2404, i have purchased GTL Infra 10000 Shares in Which 799 shares are short delivered, then at what time these shares will be delivered to me or if not delivered than my money will be refunded to me.????

  172. hitesh says:

    my client id is zt0524.
    few days back i sold 100 shares of idea,but didnt received the payout.then i received a mail from from your operation executive sonia,that i could sell those share because of RGESS.now today she informed me that there will be an auction once my account gets unblocked bcos of short delivery.
    now whose fault is this?
    how could have i known about?
    you people should have told me earlier before i bought those shares or your sales guys should have intimated me before opening of the account.
    i m not happy .
    very poor performance from you guys .
    didn’t expected this from a company like zerodha.
    now who will be responsible for the penalty imposed on me
    pls clarify

  173. Gautam Prakash says:

    Is short delivery possible in T segment stocks as intraday is not possible in those stocks? We could only sell share’s which we already in our accounts. \

    And if short delivery is possible then how could it happen (as we couldn’t place sell order untill and unless we have that quantity of shares in the Demat A/c)?

    • Akshay.A says:

      No Gautam, it’s not possible for a Short deliver in T segment stocks. You’ll be selling from your holdings.

      • Gautam Prakash says:

        But it happened as I had bought the shares but later there was a mismatch as actually in my DP account there were less shares than what my contract notes showed for which I got money credited in my account 3-4 days later.

  174. Suraj Singh says:

    Hello Mr. Kamath,

    I am new to the trading world, hardly having any knowledge about it but yet to learn so many things.

    I have received an email about “short delivery” & further as I read the article I can understand that either the shares or the funds will be credited to the account after T+3 days during short delivery process.

    Further, my doubt is how can a person sell the share without having them? even though if he sells such shares whether proceeds from such sale will be credited to his account? Before purchasing such shares, can Zerodha show an alert?

    Hope you clarify the same.

    Thanks & regards
    Suraj SIngh

  175. Abinash Senapati says:

    Hello bhai great fan of urs anyway just want to know that ….Am i able to short a stock using CNC to get extra time leverage 15:20 to 15:30 for buy back the stock on the same day. That would be great as 10 minutes more to decide…. 🙂

  176. Pritan says:

    Dear Sir,

    Account Number ZX7733, Yes I am Beginner Started Trading 2+ Months Ago With Zerodha,
    As I am No Aware Regarding Circuit Limit I Sell 296 Share Rs 60-64 Per Share and After End of the Day Except this all Positions Square Off.

    After 3-4 Hour I Check Account in Minus Rs -1,347.37 from 17400/- In Ledger Mentioned that Being margin blocked for sale Rs 18,351.36 (But As Per Contract Notes and I Checked Manually Rs 15277.55 then How they Debit Rs 18351/- Don’t Know Why Even I Send Email They Replied Please note the closing balance is showing correct as per the settlement no Other Explanation Given By Them)

    In Today 17 May In My Ledger They Again Debit Rs 16,376.04 and 18,351.36 and Account Shows Minus Rs -26,025.74. Have No Idea What To Do, Whom to Ask In Short Line this is Really a Heart Failure for Anyone.

    • Akshay.A says:

      Pritan, You should have received the details on your email. Please write such account specific request to [email protected]

      • Pritan says:

        Yes I Send 1+ Mails and They Corrected, Want to Suggest Zerodha need to also share the details with Customer in Upper/Lower Circuit Type Cases, Price of Auction/Debit Amount/P&L Etc.

        Still Don’t Know Anything regarding How they calculated in My Upper Circuit Limit Type Case.

  177. KAPIL NAGAICH says:

    What will happen if the option segment stock is not cut the position till the stock expires ?

    • Akshay.A says:

      Kapil, If you have bought options and they are expiring in the money, you would rather sell it on the exchange than letting it expire/exercise and having to pay much higher STT.If the options are expiring worthless (with 0 value), you don’t have to sell it to save STT because STT on options which have no value is zero.
      Read more here

  178. kirankumarr says:

    Hi,
    I have following doubt
    1)Let say,I am having 50k amount in my account and I did an intraday transaction.For e.g. I sold X scrip of 500 quantity @ 100 Rs each share which is equivalent to 50K. Unfortunately the price of scrip X went high and trading @ 105 Rs and which I dont want to buy @ 105 Rs.
    In this situation can I convert my intraday positions of 500 quantity to Deliver? And what are the consequences?

    • No you can’t convert it to delivery. If you have short sold, to convert you already need to have these 500 shares in your demat.

      • kirankumarr says:

        So in short,the shares that I sell in intraday cannot be convertible to Delivery though I am having enough funds in my account.
        To make it more precise, Short selling can be done only in Intraday and cannot convertible to Delivery.
        In case of Delivery,short selling is not at all possible as we doesn’t have shares in our account to place the sell order.Are my statements are correct?

  179. ADITYA WADHAWAN says:

    Sir, how can we determine whether a stock is more volatile or less volatile?

  180. Farooq ahmed baig says:

    Sir I bought one share idea on 020617 in my account now 1.84k so pls clarify me is this any problem short delivery i got a mail from zerodha

  181. Hasmukh Trivedi says:

    Hello Sir,

    why Zerodha get additional charges for auto settlement by system after 3.20 p.m. Why the time limit not increased until market close?

    Thanks.

  182. vikrant sharma says:

    Dear IXXXXX,Your traded value for 07-JUL-17 CM Rs 14502 Check your registered email. For details contact broker. Is thier any thing wrong what is the meaning of this msg do i need to worry or not please clerify

  183. Umang Raval says:

    I sold 5000 Unitech On Friday at price of 7.8 with Mis order and can’t able to buy unitech on friday and i don’t understand why i’m not able to adjust on monday and it directly goes on auction

  184. ashwini says:

    Dear Nitin,

    Please clarify my below query.
    I did one BO sell trade of Unitech at 7.8 on 7th July but Unitech share closed with upper circuit on that day because of that I was not able to close position. Now what is next ??
    I think ideally I have close this position by T+2 days. Nut it seems Zerodha already initiate closing process for my open position and that is on 20% upper price compare to 7th July’s closing price. Because of that my margin is reflecting in negative now, I think Zerodha should close this position with in T+2 days. Today scripts price is 8%-9% above. So there is around 11%-12% difference between the prices, what zerodha has consider for closing the position.

    Please let me know will I get this difference back in my available margin or I need to pay Zerodha the amount which is right now coming as negative in my margin available ?? And when I will get settlement note for this trade so that I can go through the actual settlement process ??

    • Ashwini, if there is a short delivery, brokers can’t close out any position. Short delivered quantity is settled by exchange auction mechanism as mentioned in the post above It happens on the T+3 day, 3rd working day after you took the trade.

      • ashwini says:

        Yes, it was short delivery but now it is not coming in my open positions…where I can track it now…and to me it seems that it is already settled at 20% up price(9.36) of 7th July’s price(7.8), even though it never reach till 9.36 in today’s trade. For your info..It was Unitech BO sell trade at 7.8 but because of Upper circuit on that day I was not able to square off this trade. And now when I am seeing in my positions there is no open position there.

        • 7th July was a friday. So this will be settled by the exchange on 12th july (T+3 day) in auction. Settlement will be done at auction price on wednesday. It won’t show in positions as this was a short delivery. Exchange will give us an auction debit note, which we will send it to you.

          • Venu says:

            Ashwini, when you sold stock, you received credit against such stock. Since you didn’t own the stock & weren’t able to give delivery of such stock, the credit that you’ve received against such sale, doesn’t belong to you. This is why we’ve blocked the credit + an additional 20% to account for any increase in prices when the Exchange posts auction. The Auction for the Unitech shares will be posted to your account tomorrow and the funds that were blocked by Zerodha will be reversed.

            • ashwini says:

              Thanks Venu for clarification.
              It means maximum loss can be this 20% blocked amount right ?? If auction will be settled somewhere less than this 20% then remaining amount I’ll get back in my account this is what I understood. Please correct me if my understanding is wrong.

              • Venu says:

                Doesn’t mean 20% is the max loss, we block 20% as a buffer to cover if the auction gets settled at a higher price; theoretically it could get settled at higher than 20% also.

                If auction will be settled somewhere less than this 20% then remaining amount I’ll get back in my account this is what I understood

                : Yes, you’re right.

          • We will get to know the exact value only on T+3. Usually a 20% + sell value is blocked to ensure client can’t withdraw the funds. Your auction note + margin release will happen after exchange settles auction.

          • ashwini says:

            Hi,
            Yesterday night I have raised one query and on top of that Venu has provided his comments but now that comment chain is not reflecting here. Why I am not able to see that comment ??

  185. SUBARNA says:

    i place a sell order from demat a/c. my triger price is 6 but on day trigger price was not hit, when you give my share back to my demat a/c.

  186. Pavan Patil says:

    I had bought unitech @7.40 on Friday but short deliverd. On Next trading day I.e. monday it went to 9.35 but i couldn’t sold that day. On wednesday i was unable to see in my holdings. Now it was trading at lower price which I had bought at. I’m suffering loss now. What should I do now?

  187. Nitin says:

    Sir, by mistake I made a short Sell Share 240 shares of of CDSL @ Rs. 443.30 on 13/07/2017 stock hits upper circuit @ Rs. 443.30/-. but today that share hit lower circuit i.e 399.90, then what is my position in that case.

    Sir Please Reply

  188. Kiran T says:

    I have had 30 shares of CDSL @403.32/share in delivery , now shares have been blocked, brokers said it will take 2 days to reflect in your account.
    the price is going down and down, i wanted to sell those share today, i had also tried to sell after it hitting lower circuit, what will be the result. what if price of CDSL share will be 350 or 360 after 2 days?

  189. JOVIN JACOB says:

    Sir,
    Last Friday(14.07.17) i bought 24 shares of CDSL at 483. Monday evening i got a notification from your side notifying me your purchase was short delivered.
    What is the meaning ? how this happened ? Today morning i found my account squared off & lost around Rs.11500 . If any mistake from my side?

    Regards
    Jovin Jacob

  190. Sutum says:

    Sir,
    I have 2 queries wrt my zerodha ac.

    1. Suppose I had bought 200 shares of Reliance at 100. current market price is 120. Now I already sold 200 shares @120, booking profit. After that I also want to short @120. but I do not want to buy the same day. Can I buy next day or day after two.

    2. Suppose I had bought 200 shares of Reliance at 100. current market price is 120. Now I want to short 250 shares @120 intraday without touching my 200 shares bought @100. Is this possible.

    • 1. Not possible, that would be like a fresh short, not allowed for overnight position in equity.
      2. No. At a time, you can have essentially one position. A work around is that you bought using MIS and short using BO or CO.

  191. Pawan says:

    I have question here.

    i had shorted some shares at price at rs442 and then it logged in 10% upper circuit which is rs444.4. So i could not bought it back on T day. Now on T1 day it goes high of 485 and at end of day it logged in 10% lower circuit which was near rs400. Now on T+2 day share price was below rs400.(In range of 370 to 395).
    Now, i just wanted to know in auction what could be maximum price at which my share could have been bought back by NSE?

  192. S M Rao says:

    Hi
    Pls clarify my doubt.. yesterday I did short sell 100 shares of stock X.Due to circuit limit, I couldnt suareoff by end of the day. Today I dont see the shares in my account as support tea says that it went into auction. It’ll be released after 4 days. Lets say if I buy 100 shares today and take the delivery then also my short sold shares will go to auction? Please let me know.. And also whats the percentage exchange charges as penalty for short selling?

    Thanks

    • Yes, if you buy today, u will get shares in 2 days, but you will have to delivery tomorrow. So this trade will be settled in auction.

      • S M Rao says:

        “you will have to delivery tomorrow” means what? Do I need to do specific thing?

        • Ah my bad. what you short sold yesterday, has to be delivered to exchange tomorrow. Even if you buy today, you will get the stock only day after (T+2). So you will default tomorrow even if you buy today. Nothing much you can do in this case, exchange will buy back the stock in auction on your behalf.

  193. Sandeep Desai says:

    Sir I bought Hindustan tin works 100 shares on Monday but still not got delivery or cash settlement from exchange my zerodha client Id is ZT 4422.

  194. AVINASH says:

    Sir I bought say 100 shares of Company A on Monday for rs. 100 each and then sold the same shares on Tuesday at rs. 105 each suppose before close of day I buy them again when their price is rs 98 each, what is the actual price i pay to buy the shares.

  195. Chandan says:

    If I buy a stock on Monday and sold it on Wednesday morning.
    1) Will it lead to a short delivery if I get my delivery by Wednesday evening,as I have to deliver it by Friday evening.
    2) If I couldn’t get my share and I get it through auction on Thursday.will it lead to short delivery

  196. Poonam says:

    I short sold Parsvanath on July 25. However, it hit Upper circuit that day and I could not close the trade. It seems to have got auctioned. How do I get to know the rate at which the scrip was auctioned? It does not display in the P&L statement, nor does it list in my Tradebook.

  197. vicky says:

    sir what type of settlement process does options goes through ??

  198. Ravindra says:

    Hi,
    I am facing this same issue and got mail from Zerodha.
    Can you please let me know in how many days I will get my money back?

    Ravindra

  199. Imran says:

    I did a short selling on 14th Aug, and i was not able to buy back the shares as no sellers were available at eod.
    In that case i might need to pay a penalty of max 20%, but my full amount is gone.
    Please help. My client code is ZF7502

    5 16/08/2017 EQ Call and Trade Charges for 2017155 ₹23.60 0.0 ₹1,677.27
    6 14/08/2017 EQ Being margin blocked for sale of CIGNITITEC-EQ ₹2,383.26 0.0 ₹1,700.87
    7 14/08/2017 EQ Call and Trade Charges for 2017154 ₹47.20 0.0 ₹4,084.13

  200. Imran says:

    Now this cannot happen with your broker as Zerodha is because we let you buy/sell equities with 2 product codes: MIS (for Intraday) and CNC (for Delivery). All Intraday trades (bought/sold with the product code MIS) would automatically get squared off at 3:20 pm ensuring that even if you have not squared it off yourself the system does it for you.

    There is a big fraud in this statement. You must have to mention that for doing this you will charge Rs.23.6 per scrip.
    So suppose i just have one share of xyz company @Rs 10 and one share of abc company @Rs 5, then Zerodha will charge 23.6 x 2 = 47.2 for doing this great favor. And most interesting part is that there is no bill for that, you will never ever know this until you see your trade book and really understand whats there in the trade book.

    They must mention it in the contract notes, or they should send a separate mail with the details of this charge but they do not do as they are doing a fraud. We need to check with SEBI whether this is really allowed to charge customer without their knowledge (bill) ?

    • Imran, DP charges is an industry norm. We charge among the lowest, you can compare with all brokerages. You would have signed DP charges doc when opening an account.

      • Imran says:

        Well Nitin, I am not talking about the DP charges. You are charging call and support charges without any call.
        1) you have mentioned here that zerodha do auto square off for MIS order but you have not mentioned that you charge over 20 rs per scrip for that.
        2) you charge this amount in the name of call and support charges but there is no call for this and there is no manual work for this.
        3) I do not get any info that you charge this amount if I don’t see my trade book. Ideally whatever you charge you need to provide me a bill for it. If I buy a share of few paise even that is reflected in the contract notes then why not this amount.
        4) this amount is not even shown in the profit and loss page.

        First you need to mention that you charge this amount for your automatic square off of MIS orders. Second you need to provide a bill for it.

        Thanks

        • 1. We have in multiple places, including here: https://zerodha.com/pricing. All orders executed through our dealer terminals are charged Rs 20 extra.
          2. There is an additional overhead for us and hence we charge. You can avoid this by squaring off yourself.
          3. Go to q.zerodha.com and click on ledger under reports. All additional charges show up there.
          4. P&L page not showing, can you email [email protected], we will check that out.

          • Imran says:

            Thanks for the Answers, Yes now i see that its mentioned at https://zerodha.com/pricing. But its not easy to go thru all the links zerodha have. So ideally if its reflected in my P&L page, i can look for it and i can find out that i can do a squareoff myself or if i can get a bill of this in my email i can know about it. But currently there is no bill and no info in P&L details. This does not looks good.
            I will send a mail regarding this to [email protected], please take care of that.

            Other then this issue i have no complaints from zerodha, and you are doing a great job with good services.

            Thanks

      • Ranjan J says:

        Hello Nitin,
        Could you please let me know on this:
        If I have short sold a stock today (MIS) but there were no sellers afterwards and I am stuck with this short position. Now, today the stock closed at upper circuit of 20%.
        QUES: I wanted to know if the stock’s upper circuit/band gets revised the next day to lower limit, say 15% or 10% or the limit stays at 20%.
        I am worried because my position will result in a bad delivery and exchange will go to auction on T+3 and if the stock keeps rising, I am gonna end up with a heavy loss.

  201. Eshwar Pawar says:

    Hi,
    Nithin Kamath ji, I must say you have got a very nice way of explaining this complex matter. I really appreciate it.

  202. Saurav kumar says:

    Well explained.
    Hat’s off

  203. Deepak says:

    I sold 1780 shares of religare under MIS and couldnt square off due to upper circuit.. It took the amount of 71K from my account… This is short delivery default.. How much will be the penalty in Auction? Will I need to pay more than my capital.? I am worried because my account value is showing -2.9 lakhs.. I just traded for 71K…. Please help….

  204. Mudit Narang says:

    What if I buy share as a CNC and sell it on same day at higher price. And later in the day I buy same quantity again as a CNC product.

  205. raja says:

    Dear Nithin,

    1- For example, if I purchase and sell CNC order within T+2 days (T or T+1 or on T+2) to someone, unless the seller become default to me, I will not become default to the buyer.
    Am I right?
    2- As per previous communications if I am right, in zerodha we can sell MIS order, thereafter can buy and balance the short in cash market. Right?

    Thank you for varsity and z-connect.

  206. pravinkumar says:

    why short sell is not possible for iti ltd i have fund in my accounts but order cant placed

  207. Keerti says:

    Hello Nitin,

    Kindly clarify the following :
    Suppose i place an order today for buying 100 shares of reliance but as of now i don’t have money in my account.
    Will I be called defaulter ?
    If not , How much time do I have to put money in my account ?

  208. Aishani says:

    I have a doubt regarding short selling. What if I enter into a short selling intraday deal and forget to square off the deal. what would the consequences be and how do I settle the obligation? Please do reply since your reply would be really helpful.

    Thanks 🙂

    • Matti says:

      If you’re shorting a stock, you’d necessarily have to choose the MIS product type. All MIS positions are squared off at 3:20 in the afternoon. If you forget squaring off, the team here would do it for you. (You wouldn’t be able to use CNC if the stock isn’t in your holdings)

  209. Rudresh says:

    Hello Team,

    I have a query, I have done a Short Sell under BO Order type on a stock(20 qty) and it hit the upper circuit by EOD, as a result I was not able to square it off.

    As BO order is completely intraday, will the “Short Delivery” concept applies the same way.

    May I know how much penalty I have to pay.

    Thanks in Advance.

  210. Anu says:

    Sir,
    I bought X shares on 29th SEP and got short delivered notification email on 3rd OCT saying the credit will happen on 4th OCT. But till now the shares (200 ) were not credited .. The stock is reaching upper circuit everyday .. Will i get the same share credited ? Pls clarify

  211. Venu says:

    Why does’t zerodha block selling a share in BO when it is already on upper circuit?
    I think this will make investor more safe. As mentioned , BO also places a squareoff order , but when we sell on upper circuit , No order can be placed at (uppercircuit + x rs as stoploss) and the stoploss is same as uppercircuit . Why does zerodha allow the whole BO order execute and let the client bare the penalty?

  212. Punita says:

    Hi

    What if purchased stocks and is short delivered to me ?

    Whether I will get full amount back ?

    Also whether delivery charges will be refunded to me ?

    • Zerodha Social says:

      Punita, there will be an auction on T+3 and the exchange will try to buy these shares for you. If there are no sellers then the exchange settles it in cash on the basis of Close out Rate. Close out rate is the higher of the highest price of the stock from when you sell to the auction day or 20% above the closing price, on the auction day. This has been explained towards the end of the post, would suggest you go through it again. 🙂

  213. Madhu says:

    In case of the situation of cash settlement at close out rate, does the buyer get the highest price from the date of purchase upto date of auction or 20% whichever is higher as settlement? if so, what will be the tax treatment of the profit the buyer makes out of this process, will it be STCG or speculative income?

    • Yes, in case of cash settlement. This STCG or speculative bit is tricky. I know almost everyone shows it as STCG. But it is debatable, since delivery never was taken, hence maybe should be shown speculative. Best to consult a CA.

  214. Prasun Jha says:

    This is really awesome blog …very thoroughly explained in easiest way possible…loved the blog as any other from Zerodha…amazing.
    Reason for picking this is…this happened to me last month, I ended up paying penalty, short delivered 100 shares of a stock and it hit upper circuit and it went for auction. ended up with loss of 5000/-.
    No more Short-Selling , I decided. 😀
    Thank you team. It’s enlightening. Request you to keep sending a daily mailer for individual topics so that we keep learning slowly. Regular mailers will help a lot.

    Thanks,
    Jha

  215. JP says:

    Hi,
    I shorted 1000 shares of swan energy at 158, and stock hot uc at 163.35. this moved to short delivery which will get auctioned tomorrow. stock currently trading at 154 levels. what is the maximum loss which i have to need bear once it is auctioned?
    Does it benefit if tomorrows trading price is below that i shorted?

  216. Anish K Jain says:

    i Shorted a Stock today and before i could close my position, the stock hit the upper circuit and so i couldn’t close my position. What if i buy back those stocks next morning itself? Will it save me from the auction?

  217. Amar says:

    Hello Team,

    What will happen if do SHORT SELL in intraday trading using Bracket Order under MIS with Stop loss as 5 rupees and Target as 5/-?

    example – Stock A ; no. of shares = 100 ; sell price = 50/-, buy price = 45/- ;

    Scenario 1 : Stock buy price is Success ; Will I get 500/- ?
    Scenario 2 : Stock buy price is failed ; will I loose 500/- ?

    In simple terms, when I use the stop loss option ; is there a chance of missing it and reaching upper circuit?

    Regards,
    Amar

  218. vivek says:

    kindly help me.on 23rd oct 2017 i purchased 5000 quantity punjlloyd [email protected],next day sold it @20.75.i was intimated it got short sold and after auction those were purchased @22.15. now suppose if i sell those at 22.15 whats my loss in this case including any penalty that the exchange may levy.kindly also tell me whether my initial purchase trade @20.65 would be honoured or would it be deemed as null and void . thanking you in anticipation.

    • Zerodha Social says:

      Vivek, in this case, Rs 5000*1.40 will be the penalty and will go to the exchange. Your initial purchase @20.65 will be delivered to you on T+3.

      • vivek says:

        zerodha thank u very much , it so happened that on 30th i managed to sell punjlloyd 5000 quantity @23.00 so i would be calculating the profit keeping in mind the original purchase of 20.65 or the auction purchase of 22.15, if i calculate from 20.65 than there is a profit of 11750 rupees . now will i be allowed to keep this profit or no. kindly clear the air and i wud be very very thankful to u.

      • Naga Rakesh E says:

        Hi Nitin,

        I got a mail form Zerodha on 24th October 2017 regarding “Short delivered”. Till today 30th I haven’t received any sort of units or money to my account.
        I have called to customer care several time. But the response was “EOD” End of the day I will be receiving my units.
        But it was not happened.
        I was totally unhappy with what is happening.
        Could you please have a look and help me on this.

        Thanks & Regards,
        Naga Rakesh E
        +91-7799612739

  219. NIKHIL KHANNA says:

    Dear Team,
    Suppose i have holding Srei Infra 50 stock in holding. As of now share is falling on Daily basis.
    1. Can i do Intra day trading in this stock?
    2. If i do intra day trading then, does anything would happen in my holding share for long time view?

    Regards,
    Nikhil khanna

    • Zerodha Social says:

      Nikhil, yes, you can trade intraday. The value of your holdings will remain the same since the trades are for intraday.

  220. vivek says:

    zerodha thank u very much , it so happened that on 30th i managed to sell punjlloyd 5000 quantity @23.00 so i would be calculating the profit keeping in mind the original purchase of 20.65 or the auction purchase of 22.15, if i calculate from 20.65 than there is a profit of 11750 rupees . now will i be allowed to keep this profit or no. kindly clear the air and i wud be very very thankful to u.

  221. Bhushan saindane says:

    I had short of Banknifty 25200CE on 195 and failed to buy on expiry , can you please tell me , what will be happen

  222. mahesh says:

    Dear sir thanks for the nice explanation.
    please clarify me on this.
    1)What is the point of delivery of shares required in intraday trading? It is understood that whoever shorted that day needs to buy by end of the day but due to upper circuit or any other reason could not do it so. lets say X shorted and Y bought it. by end of the day X could not bought in the market. So what happens to Y if he tries to sell before?
    2)There won’t be any delivery of shares in intraday trading if done through MIS and there is need of delivery of shares if done through CNC. is it correct?
    3)Whoever is buying in intraday trade MIS, they can sell it whenever they want irrespective of other person shorted it?

    • Matti says:

      1. X would short deliver on T+2 so Y wouldn’t get any shares on T+2. So even Y would short deliver and both would end up in an auction.
      2. MIS/CNC don’t matter. If you buy and sell same day, no delivery is expected.
      3. Yes, you can buy & sell at any time during the same day using the MIS product type.

      • mahesh says:

        Thanks for reply.
        For first one still it is not clear.
        1) Lets say in intraday trading, X1 shorted 10 shares of ABC company at 09:30AM which randomly bought by Y1. And at 09:45AM Y1 sold those 10 shares to Y2. Then Y2 sold them to Y3, and so on to Y100 by 13:00 hrs. By this time share price of ABC company touched lower circuit. And trading stopped at 14:00 hrs. In this scenario only X1 shorted shares which is not known to any of Y1,Y2,…,Y99 and they just bought it and sold it which is not shorting in same day. And also Y100 just bought it and yet to sell. As far as my understanding there is no way Y1, Y2, …., Y99 are short delivering so only X1 is doing short delivery which he needs to deliver to only Y100 through auction on T+3 day because on T+2 day auction happens.
        Is my understanding correct? If correct Y1 here or Y from your answer is not doing short delivery only X is.

        Please help me to understand…

  223. Sameer K says:

    Hi,

    Would like to know about the consequences of Short Selling in the following scenario:

    I already hold 1000 shares of XYZ company in my DP from last 10 days

    The today I short sell 1000 shares of same XYZ company and I was not able to buy again 1000 shares of same XYZ company at lower price.

    So will i still default and will have to face Auction & Penalty or my 1000 shares which are in my DP will be delivered.

    Please help me understand.

    Regards
    Sameer K

  224. mahesh says:

    Can you someone answer please???

    mahesh says:
    November 8, 2017 at 12:43 pm

    Dear sir thanks for the nice explanation.
    please clarify me on this.
    1)What is the point of delivery of shares required in intraday trading? It is understood that whoever shorted that day needs to buy by end of the day but due to upper circuit or any other reason could not do it so. lets say X shorted and Y bought it. by end of the day X could not bought in the market. So what happens to Y if he tries to sell before?
    2)There won’t be any delivery of shares in intraday trading if done through MIS and there is need of delivery of shares if done through CNC. is it correct?
    3)Whoever is buying in intraday trade MIS, they can sell it whenever they want irrespective of other person shorted it?

    Reply

    Matti says:
    November 8, 2017 at 9:48 pm

    1. X would short deliver on T+2 so Y wouldn’t get any shares on T+2. So even Y would short deliver and both would end up in an auction.
    2. MIS/CNC don’t matter. If you buy and sell same day, no delivery is expected.
    3. Yes, you can buy & sell at any time during the same day using the MIS product type.

    Reply
    mahesh says:
    November 8, 2017 at 11:14 pm

    Thanks for reply.
    For first one still it is not clear.
    1) Lets say in intraday trading, X1 shorted 10 shares of ABC company at 09:30AM which randomly bought by Y1. And at 09:45AM Y1 sold those 10 shares to Y2. Then Y2 sold them to Y3, and so on to Y100 by 13:00 hrs. By this time share price of ABC company touched lower circuit. And trading stopped at 14:00 hrs. In this scenario only X1 shorted shares which is not known to any of Y1,Y2,…,Y99 and they just bought it and sold it which is not shorting in same day. And also Y100 just bought it and yet to sell. As far as my understanding there is no way Y1, Y2, …., Y99 are short delivering so only X1 is doing short delivery which he needs to deliver to only Y100 through auction on T+3 day because on T+2 day auction happens.
    Is my understanding correct? If correct Y1 here or Y from your answer is not doing short delivery only X is.

    Please help me to understand…

    Reply

  225. Milan sarkar says:

    Zerodha send me a mail that the shares that i purchased was short delivered also telling me that the shares will be delivered to me on 24th november 2017 or I will get the credit in my ledger, however nothing happened on 24th November 2017. I waited entire day nothing happened. Please explain?

  226. sanjiv kumar says:

    sir,
    i hv 550 shares of XYZ-BE company on 22.12.17 in my demat account and i sold all shares @Rs 25.4 on 22.12.17 and after some time on the same day i.e. 22.12.17 again bought @Rs 25.5
    being holiday on 23,24,25 i found 550 shares in my account as showing T1 on 26.12.17
    now on 27.12.17 i got a message that your shares are short delivered and amount will be credited in your account.
    But i was not willing to sell the shares then without my permission how it is possible?

    • Matti says:

      Sanjiv, the seller, when you buy, has 2 days to deliver the stocks to you. If they don’t, it’s considered short delivery. There is nothing the broker can do in such cases. This is the normal mechanism.

      • sanjiv kumar says:

        Actually I bought these shares on 07.11.17 and on 22.12.17 these were in my demat account.

        Also these were in my account as T1 in 26.12.17

  227. Bhavik says:

    If i bought share on monday then can i sell the share on tuesday ?
    Because i get a delivery of share on Wednesday then without delivery of share, is it possible to sell the share on next day as cnc order?

  228. Khalid says:

    I bought 1000 shares of ITC using the funds I had in my trading account. When the prices started going high and I made a profit of 2k and wanted to sell the shares; it continuously got rejected claiming the margin funding is required. I didn’t get it, if this is the case how do i make profit in the market?? Do i have to keep additional funds in the market to sell the stocks too. As a result of this, the prices again went down and I experienced loss. Very bad experience! How will I earn then??

  229. VIJAYAKUMAR N L says:

    I bought 36 share on ELECTROSTEEL STEELS LTD-INE481K01013 on Kite app . But that 36 shares not shown in my holding list. kindly help and fix this issue

  230. Rakhi De says:

    I bought 30 share of URJA GLOBAL and sold same day(on 07.02.2018) but ZERODHA debit 30 share from demat account and 30 shown T1 holding.
    Can anyone explain it.

  231. Anuj says:

    Hello,

    I have buy 100 shares in 351 and now current price 300 and i got mail regarding short delivered. if exchange credit fund, what amount i receive.

    Can someone explain.

    Thanks

  232. Nikhil Tendulkar says:

    Hello Mr. Kamath,

    I sold shares of Sunpharma at 562.10 which I don’t hold, happened by mistake. And since I was unaware about Short Delivery/Short sell, I didn’t buy them back before market closing. I spoke to my dealer and he told me that NSE will buyback on T+3 and etc as you have mentioned in your post.

    But what will happen to me in this case as I am the seller who didn’t deliver. Will I be able to benefit in any way if the price goes down as it was a short sell. Sunpharma closed at Rs 535.35 today, So I need to understand where do I stand in this case and what are the odds of my benefit in this trade. Please reply as soon as possible, I have also mentioned my email address. I read the whole post and it was helpful but I was only able to grasp little. I will be more than obliged if you can simplify it for me

    Regards,
    Nikhil Tendulkar

  233. hemant waghmare says:

    Mr nitin i had bought 100 shares of geetanjali gems 2-3days back,,,today i when i opend mine demat account,,,its not showing any records of geetanjali gems,,,
    had it vanished,,had i lost all of geetanjali gems shares??,,or zerodha had taken it all…
    i checked mail,,,,plz help

  234. Umamaheswar says:

    Why only clearing members can participate in auction of short delivery?
    Why members will show interest to sell short delivered stocks less than the current market price?
    Why the name buy in auction actually?

  235. ElanSha says:

    What is the purpose of giving a link to the article instead of answering clearly the issue. Your customer care doesn’t even pick up the call. Your may be a good one but it is very bad when it comes to customer relationship.

    • Matti says:

      Hey Elan, the idea is to let you know that your question has already been answered. Since a lot of the questions we get are repetitive, it seemed a good idea to pre-answer the most frequently asked questions that are of a generic nature here, thus enabling the support desk to answer other questions more efficiently.

  236. archana says:

    hi nitin,
    plz answer this and dont post a link as ur customer care ppl are also not clear.
    suppose i bought one lot ob bank nifty say at 24800 fut in mis and at the end f the day i converted it to cnc.
    now when next day if i sell it its mis or cnc?
    if i sell them after 3 days at 24900 then what all charges will b deducted?
    plz reply? i am already facing issue because of other future contract where out of 21000 rs profit 15000 rs got deducted on the name of brokerage/stt/and sebi charges. ur calculator contract note doesnt shw this much charges?
    even after having margins my option orders got squared off when i was converting it to cnc.
    coupla of times i placed limit order and it got executed at CMP, it spe matters in options.
    in last few days i am facing huge losses b/c of zerodha and already opting for other demat acc now but is that going to recover my losses????

    • Matti says:

      Hey Archana. The brokerage+taxes per lot for this trade-pair would come up to about Rs. 200 per lot (brokerage is constant at Rs. 40, only the taxes would change). The remaining amount is unrealised profit/loss for the postion left open in the same contract.

  237. Rushabh Dugad says:

    Hello Sir,
    When you say ‘members of the exchange’ participate in the auction process, where do they exactly get the shares from?

  238. AR says:

    I have purchased (CNC) 25 shares of company X on 13/04/2018. Today, on 17/04/2018, my holding is still being shown as T1:25, Qty:0. I have placed a sell order and the order has been executed.
    So should i suppose that the shares have actually been transferred to my demat account and it is just a bug in Kite that has made incorrect display?

  239. venu says:

    hello sir

    i placed sell order (GATI) in day trading 118.4 and it closed at higher price 120.90 (20%) and i am unable to exit the position end of the day…. what happens …… please gv me ans

  240. vikas sinha says:

    No sellers at UC is over simplification, UC can be hit in a day, multiple times, so price can fall and rise, and there can be sellers at the UC also. But, yes true for 90% of cases, when UC is hit the share trading typically freezes, no sellers can be found.

  241. Kushagra Panwar says:

    $22Bn Short on Europea Market, by Bridgewater..
    Kindly enlighten with the concept of Short Sell in International Markets.