Consequences of Short delivery – NSE/BSE
Traders,
T+2 Delivery
What is Short Delivery?
Equity delivery based trading in India works on a T+1 rolling settlement cycle. What this means is that when you buy shares on, say, Monday (also called T day), you get the shares on Tuesday (T + 1 day). Similarly, if you sold the shares on Monday, you are required to give delivery of the shares on Tuesday after which you will get the proceeds from the sale (cash) to withdraw on Tuesday (T+1 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+1, i.e., Wednesday, September 4, 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+1. 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+1 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+1. Since you don’t have any shares, you would not be able to deliver and would default, thereby causing a Short Delivery.
Now this may not happen with your account at Zerodha because we let you buy/sell equities with 2 product codes: MIS (for Intraday) and CNC (for Delivery). Zerodha’s RMS system will attempt to square off all Intraday trades (bought/sold with the product code MIS) at 3:20 pm even if you haven’t squared it off yourself. 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+1, 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+2 (Thursday, September 5) instead of T+1.
Note: In the case of physical settlement of derivatives, if the seller defaults on the delivery, the exchange conducts an auction on T+1 day. In such a case, the settlement time will be T+2 days.
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?
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 (T+1 day of trade). For example, if you sell a stock on Monday, the auction happens on Tuesday with the closing price of Monday used to determine the auction price.
Lower cap of the range: 20% lower than the price that it closed on the previous day of the Auction. For example, if you sell a stock on Monday, the auction happens on Wednesday with the closing price of Tuesday used to determine the auction price.
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 ; 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 end up paying a considerable amount of money as Auction penalty.
The entire process:
a) On T Day Mr. X sells the stock.
b) On T+1 Mr. X fails to deliver the stock.
c) On T+1 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 day, as settlement happens on T+1).
d) On T+1, the exchange conducts the auction and purchases the stock from the auction participants on behalf of the defaulting seller.
e) On T+2, 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 (T+1).
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
Founder & CEO @ Zerodha. Partnering startups through Rainmatter. Love playing poker, basketball, and guitar. @Nithin0dha on Twitter. | Personal website: https://nithinkamath.me
Tough topic really simplified…
But, At Zerodha, no need to worry for short delivery…except BTST trade. Am I right?
Thanks..
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,
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?
Anand, on T+3 if reliance is at 960, you will get back Rs 160 or Rs 96000 back. Anything more than 960 if the auctions happen at, usually goes the investor protection fund.
And what happens if on T+3 if reliance is at 600? Will I get back 80000 or 60000?
You will get back minimum Rs 80000.
You’ll not make a loss on closeout regardless of what price the stock is at on T+3. You’re assured to get minimum investment. About the potential losses, well there’s nothing that can be done about it.
Sir,
In how many days I will get my money back ?
Sir
After
Short selling. Can I buy the same quantity on T+1
Day for delivering on T+2
You cannot short-sell stock overnight. If you have short-sold, you need to cover the short before the end of the day, if you don’t, the broker will tryout o cover it for you. In case broker also fails to cover, you will end up short delivering on T+2, because even if you do buy on T+1, that stock will only hit your account on T+3 ([T+1]+2).
But when i have got notification from zerodha by today that may be i shall receive short deliver or funds against my purchase.
when i want to clarify from zerodha on phone for this , if share not received by me then how much funds shall receive by me but surprising no one in zerodha explain it properly.
thanks
Can you email [email protected] with your client ID.
tiady i have received mail from Zerodha team….Your purchase of 900 quantity of TTML was short delivered. You will either have your purchased shares delivered to your demat account or the funds credited to your ledger (in case of non-receipt of stock) by 2020/10/29
Help on this..
Tata teleservices transections fund & units is not visible in holdings,, I bought 900 units with Avg 5.65 invested amount 5085, kindly check and update the same.
My 3000 share of Tata telegram has been short delivered.
I received an email from the Zerodha team Your purchase of 106 quantity of TTML was short delivered. You will either have your purchased shares delivered to your Demat account or the funds credited to your ledger (in case of non-receipt of stock) by 2020/11/02. You can read the consequences of short delivery here.
help on this …………
I bought 50 shares at 157 but because the seller defaulted there was an auction and I will be alloted the shares at 161 but the share is trading at 143 now won’t that be a huge loss for me?
Even on T+3, I don’t see my funds or shares, please help resolve the issue
Hi Nitin,
In the Reliance example, I may get 96000 but I may wish to continue to hold the share for a long term and the share is continuously hitting the UC .. so I may be losing the potential profits right .. giving me back 96000 would compensate the price as of that day of settlement but will not compensate my expected profits. Could you please clarify.
That is how the settlement process works, Manohar.
Sar maine Zomato ke 3000 sheyr 81.05 par sell kiye the, Wednesday ko ,usi din upar circuit lag gya 86 ka.is ka setelment kaise hoga,aur mujhko kitna loss aur profit hoga
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
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?
You have to deliver the stock by Thursday morning latest to the exchange. You get the stocks from auction only by thursday evening from the auction.
Hi,
When I as a buyer will be notified that, it has became a defaulter case, so i will be getting my shares by T+3 day ?
On T+2 you will know shares short sold to you. On T+3 auction happens to get your stocks.
For e.g.
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+2 that is Wednesday to Y then by his (Y’s) T+2 day that is Friday. So there shouldn’t be any problem or any penalty. Right?
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.
according to this .if i. Have sold je share at wednesday than here will be no penalty as i will get the share by thursday evening am i right??
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
We’ll have this checked and will get someone to call you and update you on the status.
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!
You’ve already gotten the credit on your ledger in lieu of the shares purchased. Please check.
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.
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.
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
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.
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 ?
Sir , I have purchased NIFTY call option which is in the money with Strike price 16700 by paying premium of 700 and NIFTY is expiring @ 17400 ….what will be happen at the time of expiry day ?
Hey Dilip, index options are cash-settled. If on the expiry day Nifty closes at 17400, the 16700 CE option will expire ITM and it will be settled by the exchange at the intrinsic value. You can check out this chapter on Varsity to learn more.
HELLO SIR can i sell (ex:-vedanta ) and buy t back after 1 month after 5 to 10% loss
left sharekhan and joined zerodha @ new account operating from Monday @ hyderabad @ left sharekhan due ti high brokerage charges hope earn some money with zerodha
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.
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
Rajib, Can you please send account specific queries to [email protected]
Hello
My name is kedar kamat . I am from andheri Mumbai > my log in id zs0196. I would like to know whether i can participate in bse nse auction through zerodha
If i have shares in mydp
thanks
kedar
No Kedar. We don’t participate in auction.
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.
Best you send all account specific queries to [email protected] along with your client ID.
I am very sorry to say but your support team doesnt really understand this.
You dont take into account the fact that a person might want to sell on T+3 which is his right and you remove the shares from the holding tab and the person is unable to sell.
Then the share price comes down. The person lost the ability to book his profits. This is not on the exchange but on the broker since you actually deleted our shares from the holding tab and didnt allow us to sell
You are right same things happened to me and they are not understanding it. On T+2 it was deleted from holding and i was not able to sell it and the price of share fall. Now they delievered the share with the original price at which i bought on T day. Why should i bear the loss I would have sell it on T+2 ITSELF.
Sir, you discuss like a teacher. You are stock broker cum teacher.
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.
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?
You’ll have to wait till you get delivery Krishna.
How will one come to know that the stock has reached upper circuit .
You can check the market depth. For a stock that’s hit the upper circuit, offers are zero.
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?
This same has happened to me today, can you let me know how did you tackle this?
Same happen with me on 18-Mar-2020, due to technical issue from zerodha side, i have to pay penalty..
As per process auction day is T0+2 but still i didnt get confirmation that how much this glitch cost me.
There was an instance of short-delivery occuring in my account because auto-square off did not happen at Zerodha on 18-Mar-2020, when I had short sell of 6000 ZEEL shares. As per short-sell rules highlighted in your help page, the auction price is set out at MAX value of above 20% of closing price of T+1 day. The closing price on T+1 day was 141.2 so 20% above closing price would be 170. But you have charged at Rs 185 for settlement. I don’t understand why such high price is being charged from me when it was fault in Zerodha’s system. Auto-square charges of Rs 20/ was getting regularly deducted for this service only from zerodha from my account during the past few days which shows i had been a regular user of your auto-square service. So why am i unnecessarily penalized with an exorbitant liability. PENALTY IMPOSED IS OF TUNE OF 1.25 LACS AND NO JUSTIFICATION OF HOW THIS IS ACHIEVED IS PROVIDED.
Hi Rajiv,
I am stuck with similar situation now. will they always place the bid 20% higher in auction or it might get below that too..because it should open from -20 % to 20% for auction? Please reply
Hi sir
I’ve a similar situation with Axis Bank shares traded on 7th April. Can you plz explain how your case got settled finally bcoz I’m worried about my case now and its burden on my pocket.
If you don’t mind can you disclose details of your trade (your selling price of ZEEL )on that day so that I can calculate my penalty well in advance?
Plz consider it as my sincere request and respond if possible on
My Whatsapp no is +91 8790246976
Hi Sandeep
I am having same situation as yours with Axis bank short sell. my mobile no is 9429611618, please contact me, your no is switched off
Hi Sandeep,
I too had same problem, i was trying from 12 oclk when the stock hits the first upper circuit but i was not able to do so. I short on Axis 3000 shares by 7th Apr 2020, but still now it was not auto squared off also i could not able to close.
Please let me know how did you tackle this situation.
I bought 110 shares of rashtriya chemical fertilizers but not showing in my holding I bought on Monday 1 st March mail Recieved that due to short delivery even not money showing in my ledger kindly help
We recommend that our customers to square-off their own positions before the cut-off time. Yesterday, Axis Bank hit cuticuit close to mak=rket close, which meant that there was no way we could close the trade since the stock itself wasn’t trading.
Hi Mr. Matti,
May i know how much will be the auction price (Is that 20% of T+1 or T+2 END PRICE or highest price of all the three days). And what are the other expenses which will occur other than share auction price (like any penalty / brokerage). Even after referring to the blogs and websites ( attached by Zerodha) i didn’t get clarity about the final price and the extra charges which are going to occur (Because many people in the blogs said they have been charged heavily and with different amounts which are not matching with any trade price). Please let me know ASAP.
Hi all, sorry for the late post. Finally, the share value was fixed at around 429Rs. And my avg. short selling pricing of 325 Axis bank shares was 368.45Rs.
So the difference amount is 429 – 368.45 = 60.55
So for 325 shares, 60.55*325 = 19678 INR
SO FINALLY WITHOUT ANY TRANSACTION CHARGES AND WITHOUT ANY PENALTY ONLY 19678 RUPEES WERE DEDUCTED FROM MY BALANCE.
hello sir mena wednesday ko 400 share short kiyea uppercircuit par and then i forget to buy aur sab 3 dinn sey mera balance negative hai aur zerodha ney bhi koi email nhi bheja auction related
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.
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.
Can I short in cash market on intraday basis that is I can sell before I have the stocks in my demat account and then buy it on the same day before 3:30?
Yes, you can, but you’ll have to do this using the MIS product type. This ensures that if you don’t buy back the stock by 3:20, we close the position.
Shares are not received by me and also there is no refund yet what to do?
Hi, I had a simple question. If I buy some share with ZERODHA under CNC mode on, say, Monday(T day), is there any chance of short delivery if I sell the shares on T+2 day though the shares are still not in my demat account ??
Thanks in advance!
It’s possible if you don’t receive delivery of the stock.
Sir, I am dmat a/c holder of zerodha. I have bought 200 shares of sbin at Rs. 286.75 target of 300 Rs and 200 shares of avantifeed at Rs 315.20 target of 375 Rs on 30 Jan 2019, but when my target arrived at the+2 day on 1 St Feb 2019 but there isn’t any holding showing my account both sbin and avantifeed showing zero that’s why I couldn’t sell my eaquity and I have to sell them on 4 th feb 2019 I made loss of 1580 in sbin while I could make profit of around 2600 and avantifeed at Rs 336.8
I have made mrofit of 4320 while I could make profit around 12000. I have discussed Mr siddarth who was involving in my a/c opening who told me this is zerodha’s policy that on t+2 day you are unable to see your holding in your a/c and also told me that you are trading on zero brokerage so you have to bear all this. I have asked him a/c closing form and going to close my a/c I have paid almost 2500 RS brokerage to zerodha while I haven’t started trading properly, I also have dmat a/c in reliance and I asked them about the case they told me it is not possible the holding must be shown in your trading account, I never faced such problem in with reliance,
Pls look into the matter, I hope I will get atleast my loss back.
Hey Vikas,
Request you to create a ticket from our support portal for this. Someone from our support team will examine the case and get back to you soon.
Sir
What happen if client got sort delivery on record date of any corporate action specially when client bought stock speccialy for event like dividend or buyback
After event client has no use of stock and price also fall than who bear that loss
It is not true, it just happened to me today, I shorted 6500 shares, and tried to square it off at 3:13 pm. But due to some issue in zerodha, the order didnt go through. And to the surprise, even zerodha also didnt square it off.
I wont pay any penalty for it. It is zerodha’s issue, not mine.
If you are so sure of your system. i am safe
Hey Nithin,
Today, Zerodha was unable to square-off my positions due to some technical issues in the order management system and this resulted in the short delivery of highly liquid stocks.
I am not sure what practice a client should follow in cases like these. Is it possible to close these short positions in the morning?
same happened with me…I dont know how we would be exiting from this position now !
is your query resolved …i am also facing same issue
Hi, I sold off shares of Axis Bank yesterday through MIS so that once the price comes low, i could buy and make gains.
But the share hit upper circuit yesterday and the shares could not be squared off by me.
I presume even zerodha could not…dont know how, as the share price had come down after intraday was closed but the market was upon in last 10 mins.
I have got money deducted from my zerodha account and the shares are also not sowing anywhere in my account.
Any idea what will happen and when i will get shares or money?
This will be settled at auction. You will not receive shares, you will be required to purchase shares in the auction market and deliver to the buyer.
Sir,
I had sell axis bank 1000 shares(MIS) at 378 on 7 April. From 3Pm I had tried to buy it but not able to buy. Then I had received mail from zerodha about shory dilivery & open position. But still exchange not happen & not receive my fund. Can help me what should I do? When will receive my fund?. I have also sent mail to support but not receive reply from them. Please help I will receive my fund back?
My stock is short delivered yesterday. How much time it takes to fund my account.
What happens if i sell shares on t+2 days before the shares actually hit my demat account….can i get into problems because of short selling??
I buy some shares 400 in quantity but it automatically gets short delivered and now m not able to see my shares in my holdings. and my money is gone too what’s going on please tell.
Hii sir I bought JKTYRE STOCKS On 20th jan and untill 22 jan it shows in my holdings but now it can’t shows on holdings and not even fund shows…
I did not sold it even what happened with my stock dont know
Please check your email for details. The person who sold it to you may not have been able to deliver. This will be settled at auction 3 days after the trade.
Sir I have short sold 1329 shares of Bajaj electricals at 906 but the Bajaj electricals hits the upper circuit and closed at 922.05 due to which I was not abled to square off.
What will the loss?
Sir please please please reply sir🙏🏻🙏🏻
My equity not shows in my holdings because of short delivery of stock
Sir,I bought 15000 shares of Central Bank Intraday at total of 39500 +-100 on 10 April(Friday) and got upper circuit.My total funds were 56500+, on T1 day my funds becomes -12688 and still it’s same on T3 days.Neither shares has been shared to my account nor I sbuy them.And can you explain how my funds in negative means I have invested 39000 and after auction I have to pay 69000 . Can you explain sir.
Hello sir,
Greetings to you
Sir i have been trapped in this short selling of angel Broking on 06th may 2021.
I have short sell the 2001 shares of angel Broking at the rate of 453.67 and then the stock has hit the upper circuit and i was unable to buy the share. The next day again it hits upper circuit and closing price is Rs. 563 .
Sir what price will be going to quote by exchange and how much penalty and loss has been applied to me.
Sir i lost everything i have earned in these 4 years as i don’t have the knowledge of this auction process.
Kindly reply sir
I am dying with tension
I am in the same position today. Did the auction happen with your shares? What happened today?
Kindly share your number. Can i call you. I am also tensed due to this issue
Hey Priyanshu, can you please let me know, what are the loss you suffered from your trade, It would be clear by now I guess..
I have same situation with fretail stock on Friday 11 June. I sold 10,000 stocks at 60Rs and it hit upper circuit limit. Now every day it keep going up by 10 percent. How much they charged from you? Now it’s at 72 rupees on Tuesday. Zeroda is not helping. Did get any email regarding auction? Please reply
I also have similar situation. I sold shares (MIS) of future retail and now it hits upper circuit. I am not able to buy same. Sandeep can you tell me how much loss did u incur in percentage?
Sir… it’s been same day for as that given by u !! Sold on mis it hit UC …
Now what ? What I have to do…what would be the loos ? When can I trade again ?
Dear Nitin,
I have sold 700 share at 213.50 of sparc for intraday on Monday. The share touched its higher circuit 221.85 and I was unable to buy back. Today on Tuesday the share closed at a price of 225.35. How much penalty amount will be debited from my account.
Who is hitting upper circuit? Are we the traders responsible for hitting upper circuit? No, right? So why punishing traders for the wrongdoings of NSE? NSE very well knew when to hit upper circuit or lower circuit, they can check in system and hit circuit when they realize that this is the best time to loot traders’ money. They have by now conceived lot of ways to cheat traders and nobody is taking action as all are getting their shares of loot in timely manner.
What would happen if one has a short position (MIS) and the stock gets stuck in the lower circuit “SELLERS ONLY” will he be allowed to exit his open short position. The trader has no share in the demat account as he had placed an (MIS) order. In this situation even though the trader is right about the direction of the trade will he be held liable for short delivery?
Sir, please post this article in Hindi.
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.
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.
How can we know that we had a short delivery and is the penality settled from funds in my account? Or there is some additional procedure to pay penalty
Penalty is charged to your trading account. If you don’t have sufficient funds, it goes into debit equal to the shortfall.
I faced this issue today with ZERODHA.
I bought Eicher shares on 29th Aug as a regular delivery for 16500+. Those stocks were listed in my holdings yesterday. But today, I don’t see those shares listed in my Holdings. Customer care told me, those shares are not listed today due to Short delivery, and Zerodha doesn’t have any control over short delivery and it may happen anytime and asked me to wait today EOD if I will receive Eicher shares or the money back.
Pl let me know, how to avoid this in the future using zerodha.
Kumaran,
There is little you could do(or Zerodha) to avoid short delivery as the seller you bought from failed to deliver the shares to you. You will have to wait till T+3 day when the stock will be delivered to you after the auction.
Ok. thanks for the reply, Faisal.
In my case, even after T+3 days, i did not receive any updates. Could you pl let me know, when will I get the final confirmation on this? Currently, I don’t have the amount paid for purchasing the stock or the purchased stock with me.
T is 29th Aug (Thursday),
T+1 is 30th Aug (Friday),
T+2 is Sep 03 (Tuesday),
T+3 Sep 04 (Wednesday)
Kumaran,
by T+3 end of the day, you should have received a confirmation, if you do not find the shares or amount credited to your account, please create a ticket here and our team will check and assist.
SIR
Today i bought shares in mis and now it hitted lower circuit what will happen as the position is showing open after 3.30 pm also and there is pending sell order. will i be charged something ??
Since you’ve bought stocks, you will receive delivery of the stocks. If you don’t have sufficient funds in your account to purchase the stocks, they’ll be sold on the market to make good of the debit.
Today I’m unable to see me purchase of HIL on 19-Jun in my portfolio.
Kindly help on immediate basis
Purchased CLNINDIA(clariant Chemicals) on Monday (13 July) as it was announced special dividend 140/sh and it’s ex date as 16 July. But by 16 july shares not credited to my account. Will i get dividend amount or not. ? If not who is responsible for my loss?
Please clarify
I shorter 2100 shares of bajaj consumer yesterday @178.70 and it closed with a circuit of 180.45and did not opened yesterday. Can u tell me what is the maximum penalty i might have to pay for this ?
sir, I bought 50 shares of A on 15 sept in cash segment in ICICI direct, however ICICI has only credited to shares to my account on 25 Sept . The share went up 15 % before falling by over 20 % from CMP by the time it was credited in my account.
Can I seek compensations from ICICI direct for this .
Since auction happens on T +2 ,
Is there a way I get to know the price at which it was bought and the amount of valuation debit that was deducted.
Curious to know before T +3
“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”.
Then how will one be able to do shorting trade?
And Sir, Can you tell me another way to ask and clear doubts with you rather asking doubts in this comments section and for checking answer,each time I need to scroll down for 5mins to find out where my question was.It is a bit hectic. Can you please suggest another way like through mail or any other option.
if I am Selling Share but can get that share back on the same day but same amount
Sir, i have short sell the shares of angel broking on 06th may 2021 at 453 per share of 2001 quantity and due to upper circuit, i was unable to exit my position. And now again the stock hits upper circuit in next day and reaches Rs. 563/-
Sir can you please tell me, how much auction penalty has to be paid.
Sir i was not aware of this short delivery and auction process and now i am trapped in the greed and ending up loosing all my 4 years Savings. Sir kindly tell the approximate amount which i need to pay as an auction penalty. And what price will exchange is going to quote
Hi Team,
This post only discuss about penalty for Mr. X and the funds which broker charges Mr. X for short selling.
The actual loss is to the buyer who missed an opportunity to book profits when the stock hits upper circuit during this period from T to T+4 days.
If on the T+4 day the stock has gone to lower circuit again, then the buyer has missed opportunity for booking profits for his trade and also buyer has to bear the losses if stock starts hitting lower circuits from T+4 day.
I see one thing here in both the circumstances buyer/shorter will be penalised but broker makes profit out of this issue.
Can you please provide detailed explanation from buyer’s point of view.
Ideally decision power on this issue should lie with buyer whether to get the stocks or funds at higher valuation in case of stock hitting upper circuit.
I have short sell 55 venkys at 3104/share and i was not able to deliver the shares and it goes in auction market as per zerodha CC and 2.16lac deducted from my account .
So how much money will i get at the after settlement after t+3 days if share price goes at 3789/share in auction market .
Will i get shares in my account or money credit or any other thing will happen
So how much you suffered the loss?
Hi sir, any time limit for short selling ? Can i short sell after 3.20 pm ?
I had short sell through MIS order 7000 shared at 460 rupees in VIP industries,but the stock hits upper circuit at 462.95 rupeess,so that Couldn’t able to square off the position on Thursday.My account opening balance is around 5.7lakhs but now showing -89k.May I know the leverage and penalties for the short sell.When the auction finalised amount can be settled into demat amount??.
I bought 150 shares of IOLCP ON April 1, 2022. Shares were short delivered. Now it’s April 7 (T+4), No refunds no shares delivered. Also no information about the auction proceeding. @nithinkamath. I am losing opportunities everyday because of this. My client ID is CT5181
Hey Gagandeep, we’re sorry to hear this. We’re having this checked, you’ll have an update on the ticket shortly.
what is Investor Protection Fund?
Will the money be transferred to me?
I’m stuck in sort selling and hit upper circuit. Today it will be calculated my loss in this case. Wish me good luck
How much margin do i require to short an option lot of nifty
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.
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.
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.
“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.
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.
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
Hello,
If i shorted some quantity of stock(equity), is there any time limit to buy back(short covering).
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.
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?
Looks like you shorted the share and auto square off didn’t work because the stock had hit upper circuit (no sellers). This will be treated as short delivery by the exchange as mentioned in the post above.
So, what do I need to do now? Will it go for auction, or buying 150 shares would resolve it?
Buying it now is of no use as it will be delivered only after two days whereas you have to deliver this to the exchange tomorrow. This will go to auction.
Hi,
What about delivery(CNC) based, does it has any time limit
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,
what if i buy back the share holding which i sold on the same day?
if u do, it will be considered as an intraday trade.
means, for example, I sold 100 shares at 100 rs each from demat, and buy back 100 shares on same day at 90 rs each making 100 rs profit, Does this again take T+2 days to get 100 shares delivered ?
pls reply
First of all i am a normal zerodha customer and not associated with zerodha
if u sell from demat account say 100 shares of XXX
and but 100 shares of XXX on the same day
it will have zero effect on the number of shares of demat
the calculation i guess for transfer of stocks happens at the end of the day so at the end neither u have bought nor sold your shares to anyone
so if your demat has 1000 shares of XXX
it will still have 1000 shares of XXX
and yes u can still safely sell your shares the next day
given u are selling under 1000 shares of XXX
cheers
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.
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,
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
Generally the buyer gets cash back higher than what he invested.
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,
Thank you for the prompt reply.
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. 🙁
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
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.
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.
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.)
Depository will accept stocks from any account for the sake of payin. The person from whose account these shares are being transferred has to account the transaction correctly.
Hi Venu,
Will it not be a third party pay-in?
As I said earlier, when the shares are to be delivered, it wouldn’t matter whose shares they are. The person delivering it will have to account it accordingly.
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,
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.
Ashok,
Silver mini is not a compulsory delivery contract, so what this means is that there is no issue if you have forgotten to square off. The position will be auto squared off from the exchange based on yesterdays closing price of silver mini.
Cheers,
Thanks for the reply
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.
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
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…
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.
sorry rs 10000
Jaya,
We give upto 20 times leverage, so upto Rs 2lks with only Rs 10,000 in your account. Can you check this
Nithin Sir Above 2 To 3 Lakh Cash Margin How Much Intraday Margin For NSE Cash F/O MCX And 5 Lakh ZERODHA DEMAT stock Towards Margins Against F&O MCX Positions And Intraday Giving ZERODHA
Check this link for margin calculator and here for Margin policies.
Hi Nithin,
In your comment you have mentioned that Zerodha provides upto 20x margin. However, I could not find even one scrip that says the margin provided is 20x. I used the URL for “Margin Calculator” as you mentioned in your comment. Please correct me if I am looking at something wrong.
Nain, to get extra leverage, you need to use either bracket orders or cover orders, check this link to leverage you get for those products.
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.
Why don’t we allow clients to sell shares in Auction market where exchanges buy for short deliveries? It will be a helpful addition.
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.
STT is charged on the sell side of the transaction, 0.025% on the selling side turnover.
Dilip,
Very clear cut idea about short selling.
i was searching from last today.
thanks,
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)
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.
Auction will be on T+3 day, so on T+3 evening you will get to know.
Dear Mr.Nithin,
Please clarify the below:
(T)Tuesday- I short sell the Axis bank share @ 380 and its getting circuit and no square off.
(T+1)Wednesday- 396
(T+2)Thursday-420
which price they are going to penalize to me.
Thanks and regards,
KHALID
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.
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
Jayanth how much you lost man, i think urs is minimum, i lost 1,50,000
Hi Manohar,
I lost 12000..
Hi Jayanth,
at what price ur shares have been auctioned, please tell me , HDFC sec have auctioned my shares at 31.74
Hi Jayant, Please let me know at what price ur shares have been auctioned,
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.
Hi Nithin,
eventhough If it hits upper circuit, still the shares will get squared off @ Zerodha
No, if upper circuit hits there is no way to square off, in todays case HCL had not hit a circuit and that is why I mentioned that.
@Nithin, Shares will be automatically Squared off @ 3 o clock, if not happened, u will be in huge loss, as i lost today
At Zerodha the square off happens at 3.20pm, guess you are trading with another brokerage. But yes, even if there is auto square off the onus is on you to ensure that it is squared off.
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.
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
Manohar that is the risk with auction, there are times when the auction price could be as much as 20 to 25% above the current market price.
Hi Nithin, What happens if i do short sell and stock locks at Lower Circuit, will my shares get Squared off
When you short sell and stock hits lower circuit you will be in profits and there will be sellers to buyback your short position before close of day, so yes it will get squared off.
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
At Zerodha we charge Rs 20 per executed order irrespective size and what you are trading. We also give a benefit saying 0.01%/0.1% or Rs 20 whichever is lower per executed order. So if you are buying Rs 1000 worth of delivery you pay Rs 1, but if you buy for Rs 1lk, you will pay only Rs 20. Check our Pricing and Brokerage Calculator.
Margin for equity trading: https://zerodha.com/margin-calculator/Equity/, we also offer cover orders where you get much higher leverage if you are using a compulsory stop loss order, you can use the BO&CO calculator for that.
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
Yes you should get an auction settlement statement separately, you should ideally have gotten it by now. The statement format will differ between brokerages.
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?
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.
whatever arbitrage opportunity, you will have to play it only for intraday. Long in one short in another, square off before close of day. If you buy, you will have to wait for T+2 before you can sell on the other exchange.
Hi, Will there be any extra charges apply if I buy shares ( Not Intraday ) in NSE and move them to BSE and sell them.
Do check this Santosh. Once the stock is in your demat, you can sell it on any exchange (there is no concept of moving from NSE to BSE)/
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.
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.
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.
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
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
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.
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
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.
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.
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.
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.
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 !
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,
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.
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.
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
@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.
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
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)
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.
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
Do ask account related queries by sending an email to [email protected]
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.
My doubt clarified. Thank you very much sir for your reply.
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.
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.
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.
@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.
@ 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
@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).
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.
Ankit, won’t be fair to comment without knowing both sides of the story.
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).
Thanks Nithin. Lets hope for the best. If the credit goes to Investor Protection fund, how much ? We have any % amount ?
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
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 ?
It doesn’t matter if you are doing arbitrage or not, STT is 0.1% for both sides while trading delivery, whereas it is 0.025% on sell side if you are doing intraday. Check this.
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.
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.
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.
On Short delivery trades margin is blocked until T+3 days (when the auction happens, 3 days). Yes most brokers block around 150% because the margin for which you have shorted is in turn blocked by the exchanges.
And one more question if accidently short delivery happens then when the person receives the auction shares is it(t+3 or t+4) evening.
T+3 evening or latest by T+4 afternoon
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.
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..
Hmm.. Can’t really comment without knowing both sides, but yeah if you sold without the stocks hitting your demat, it is a risk you take.
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
Yes, the safest way is to wait till you get delivery of stocks before selling.
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.
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
Hi Manohar,
In this case share prices has go down
Is it Intraday, If Yes share would have automatically get Squared off
yes it was intraday(MIS) but share price hit upper circuit
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
Hi,
Mail Received: Purchase of xxx quantity of CLNINDIA was short delivered. You will either have your purchased shares delivered to your demat account or the funds credited to your ledger (in case of non-receipt of stock) by 2020/07/16.
Question: CLNINDIA will be ex dividend on 16th, In case funds get credited to my amount what happens to the dividend amount… would it be a loss because as per depository records I’m not the beneficiary.
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.
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.
The whole money debited is not a loss, only to the extent of the auction price – your selling price, will be the loss. Money should ideally be credited on T+4 day.
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
i’ve asked this because on some other broker platforms there is a clear distinction by labelling the trades as “go short” or “go long”
Yes, right click and use product type as MIS and sell first instead of buy first. As simple as that.
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
No demat debit will be applied only once at the end of the day as the 40 shares of this stock is debited one time after market closing.
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%
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.
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.
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.
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.
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.
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.
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.
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!!
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
Penalty charges will depend on your brokerage, with which brokerage are you trading?
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
Settlements in options is on T+1 day basis. So if you sell the options today, you can withdraw the fund tomorrow (which is T+1 day).
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
Sanjay, it will be considered as an intraday trade and all your charges will be lower
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.
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..
It won’t be the exact market price, but will probably be slightly higher than it.
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.
Sidharth,
If there is any individual account related issue, it is best you sort it out with our support directly.
Okay,
Thank you.
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.
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
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
Sukesh, yep, we have had defaults. We have taken all the steps mentioned on that QNA link :).
Thanks Nithin.. How are defaults possible if the RMS team automatically squares off the positions at around 80% of Margin Requirement?
Does this happen mostly in illiquid contracts?
On NSE F&O not much, but in commodities it does especially since margins are so low and commodities very volatile.
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.
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.
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.
1. If you buy using MIS 100 shares at 150, if you want to carry forward this to the next day you will have to convert it from MIS to CNC. To convert to CNC, you will be asked the entire Rs 15000. As long as you have this, you can convert, otherwise not.
2. If you have used more margin, then you can convert only to the extent that you have cash in your account.
Thanks nithin..
May i know what is the timeline for doing it?
Until 3.20 pm
This is all time good explanation for me because I fell in short sold
Good explanation with example. Thanks
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.
hmm… there is no way out Deepak, buy stocks today won’t help.
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.
You will be huge loss
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
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.
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%.
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.
Sachin, we don’t have any special brokerage for penny stocks. You will pay 0.1% or Rs 20 whichever is lower. In your case your total turnover will be Rs 300, so your brokerage will be Rs 0.03. Check our brokerage calculator.
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
If you want to avoid auction, you will have to find someone who holds 250 shares of Wonderla and ask him to transfer it to your demat account before 2nd March evening.
Pretty nice post. I just stumbled upon your weblog
and wantged to mention that I’ve really loved surfing around your weblog posts.
In any case I will bee subscribing on your rss feed and I
ope you write again soon!
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
No additional charges for MIS auto square offs that happen at 3.20pm.
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
Yes Manohar, you can buy it as NRML and sell it the next minute or the last min on the expiry day.
Hi Nithin, Thank you for the clarification, what is the difference between Intrdaday Equity and Intraday Futures
What you are asking for can’t really be answered in two lines. Why don’t you check Varsity, you can get started by learning the basics.
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
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
Yup. Just one of those rare situations when you make a profit on an auction trade 🙂
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).
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
All delivery of shares happen on T+2 day basis. So if you sell something today, it gets delivery day after. So no not possible.
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.
It will be an intraday trade, and hence speculative.
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.
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 ?
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.
Thank you for your reply sir. I’ll try to get my pan card and address proof as soon as possible.
thank you.
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.
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.
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.
At what price did the auction happen in your case Mennon.
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.
:), we don’t participate in auctions.
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.
Yes you can sell on the next day, check this post.
Thanks a lot. The post has explained all the points in an easy way. 🙂
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
Basically the person who sold u the shares would have defaulted. In this case exchange will do a square off transaction, and cash will be credited to your trading account.
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.
1. First in first out (FIFO) is to be followed.
2. Having this checked, can you send an email to [email protected] with client ID.
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
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.
The holdings have already been updated. We’ve arranged for your Statement of Holdings to be sent across to your email ID.
I CANT WATCH MY PREVIOUS HOLDING SHARE ( VEDANTA- 57, EROS- 42, UNITECH- 4000),. PLZ UPDATE MY SHARE
i have shorted pipavav def share @90.20 800shares on 24th dec 2015 shall i get profit ??
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.
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
Credit has already been posted to your account as on yesterday’s date.
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?
1. Yes, it’ll be considered as an Intraday and will be covered back at 3.20 pm
2. Yes, CNC stock will be used to cover the default
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.
Once you sell and don’t cover back the same day, you’re obligated to deliver these shares. Non delivery will result in an auction.
Use kite.zerodha.com on your mobile, its better than the mobile app. Learn more here: http://zerodha.com/z-connect/tradezerodha/kite/kite-introduction
Sir
In which date I can buy to complete the position?
You can’t buy it yourself, on T+3 day, exchanges will conduct an auction and buy it on your behalf as explained in the post above.
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.
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?
No charges from our side. You will have to find how much does SBI charge.
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.
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.
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.
We believe one of our agents has explained to you the basis of computation of average rates and your issue has been resolved.
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.
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
Can you send an email to [email protected] with ur client ID
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.
Only working days are to be considered for computing settlement days. The credit of shares has been given to your account on Friday (T+3), since the cut-off time had passed, the credit went to your account today morning.
Thanks for the reply Mr.Venu. Today I can see 400 shares in my Account. How to view my demat account?
Thanks
mathes
You can sign up for easi, a facility provided by CDSL (https://www.cdslindia.com/crosslinks/easiwriteup.html) to view holdings in your demat account.
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.
Hello sir,
can u pls explane me clearly about intraday and delivery i am new here
regards,,
Sanath, it is explained in the post above. If you need to know about trading in detail, check out: http://zerodha.com/varsity/
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…
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
1. Currently no
2. You can buy the stock and hold it for 3 to 5 days. But you will need 100% cash for doing this.
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.
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.
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?
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
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,
No, it will be considered as an intraday trade.
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?
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.
Kakatiya cement, buy quantity 63@477 on Monday.
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?
Hmmm… If you told him to sell 600, it is your liability to have those 600 shares. But yeah, I get your point that the broker had to be more diligent.
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 ?
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.
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.
Yep approximately.
I am doomed then.
By any chance does Zerodha have Internal Short Settlement process ?
No we don’t. The payin obligation will have to be met by the client himself.
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?
Only on T+3
In case of short delivery, if there are no sellers for the shares. What amount is credited to my account? 20% higher, close price?
Firstly on T+3, exchange will try to give you the shares from auction. If no one tendering shares, then settled in cash. What price, hmm… it depends.
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.
No, if you bought and sold same day it will be considered as an intraday trade. That is not called short selling.
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.
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.
The new backoffice we are building, will have this.
Hi Nithin Sir,
On 20july2016 short sold 5000@56 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.
Penalty depends on the auction settlement price. Can’t say.
You won’t get shares, margin will get unblocked and whatever the auction price will be settled.
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)….
T0 price. Also this is upto 20%, not a guaranteed 20%. No future risk, cash will hit your trading account.
Is a contract note a guarantee of share delivery?
No. A contract note only confirms trades executed and gives you details of the charges applied.
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
🙂 🙂
1. No
2. You can start investing very little.
3/4. Suggest you to look at this: http://zerodha.com/varsity/
thank you for suggesting link. very helpful
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?
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.
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.
sir, i’m buy 200@ntpc 14/09/2016. and today not show in my a/c … please help me
The following email was sent to your registered email ID yesterday.
issue reg.short delivery has been well explained and it help new investors
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.
This means that the person who sold the stocks to you defaulted. SO exchange will run an auction tomorrow and buy this for you. If they can’t, they will settle it in cash tomorrow evening.
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)
Hardik its very simple yar……
please refer the BSE/NSE guideline note.
i sent you mail for the same with highlighted in yellow. 🙂
This is set by the exchanges to avoid excessive speculation.
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.
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?
You have to do nothing else, just sell using product type CNC
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?
Yes, DP charges of Rs 13 applies irrespective of the quantity you sell.
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.
It is mentioned on the charge list https://zerodha.com/charges, on brokerage calculator it is a little tricky because this Rs 13 is irrespective of how many ever trades you do during the day.
Thanks for reply. Please tell me about turnover charges because there is some ambiguity on zerodha charges page regarding turnover charges.
Turnover charges include Exchange transaction charges and clearing fee.
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
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.
But intraday doesn’t take t+2 days to the best of my knowledge!
Can anyone else help out.
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.
sir, i am use kite web. i purchase share from BSE but i want sell i always show rejected why?
Can you send an email to [email protected] with your client ID. They can check and let you know.
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
Nayab, it depends on how much time the broker gives you to pay back. Ideally it should be paid back immediately or else the broker can take legal action.
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.
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.
Exchanges in India settle on T+ 2 day, so if you sold on 25th which is friday, you will get it on 29th (wednesday, after 2 working days). We put 1 paisa flat, since we can’t put zero since we are providing a service.
Now i got it. Thank you very much sir.
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.
Arpit, very tough to say what price auction will be at in case of such low cost stocks. Have you seen the stock widget for fundamental data? We have more coming on it.
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??
Are you trading with Zerodha? Intraday trading in T2T scrips is normally not allowed. What you sold, gets delivered from the previous holding and what you’ve purchased results in delivery.
No i dnt trade, bt wht ll happen to those shares?
At Zerodha, we normally don’t allow Intraday trade for T2T scrips.
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…..
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.
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
No, if you’ve bought and sold in MIS, there’s no risk of short delivery/auction.
Thanks sir.
Sir, by mistake today i sold 250share@316 of lt food. can you tell me how penalty should be covered from me…
is there any positive sign to avoid this penalty
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.
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.
You’ll get the sell credit, the day you sell it. Can you write to [email protected] for account specific queries?
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
You will get the shares one day late in your demat.
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
If you’ve bought and sold the same quantities today, there’s no case of short delivery.
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
Short delivery would mean the person who has sold you the scrip failed to deliver the stock. I am going to check on the reason what is sent to you and get someone to call back.
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
Hmm. if it is showing 0 increase decrease, that means there is no trading happening on them. You will be able to place orders, even if there are no trades.
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
No debit and credit in DP, this will be treated as intraday trade.
Thank you very much for the clarification Mr Nithin
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
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?
Hmm. best u send account specific queries to [email protected]
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.
Hi nithin,
Is there short delivery and penalty in future and option , since there is no delivery??
No
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.
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.
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
STCG is 15% of the gain.
Nithin, if it is STCG for debt instrument isn’t it applicable slab rate? Did a quick check on few websites. Here is one…
http://www.valueresearchonline.com/story/25599
Yuvaraj
Ah my bad, thought you were asking equity. Yes, it is as per slab rates after indexation. CHeck the chapter on investing here: http://zerodha.com/varsity/module/markets-and-taxation/
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
1. It will become delivery
2. Those 100 shares will be delivered, it won’t be short delivery.
Thanks a lot Nithin!!!
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.
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??
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.
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?
If money is credited, you will get to see the credit on the ledger. Login to q.zerodha.com and click on the ledger option.
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.
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.
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
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.
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
1. No
2. If market order, buy will get bought at best offer and sell at best bid.
3. You can place two orders, once you take both the orders, it acts as a spread.
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.
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.
Thank you Nithin,
1. We better take Huge volume stocks to avoid Upper Circuit problem, isn’t it ?
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??
You should most likely get the stocks one day later, i.e today evening. If exchange can’t find shares in auction, they will credit money (around todays price of the stock)
I got the similar message “`Your purchase of 2 quantity of RELIANCE was short delivered. You will either have your purchased shares delivered to your demat account or the funds credited to your ledger (in case of non-receipt of stock) by 3/23/2020. You can read the consequences of short delivery“`
who is at default here, did i missed something while placing the order, or other party is not able to deliver the share?
if it’s the other party then why should i be worried about consequences of short delivery ?
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.
Not possible.
Sir
Suppose I buy a lot for intra day future . May I sell it any time or only at the end of market time?
If you buy as MIS, yes before end of day. If you buy as NRML, then anytime you want until expiry.
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.
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.????
T+3 day it will be delivered.
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
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)?
No Gautam, it’s not possible for a Short deliver in T segment stocks. You’ll be selling from your holdings.
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.
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
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…. 🙂
:), not possible currently .
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.
Pritan, You should have received the details on your email. Please write such account specific request to [email protected]
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.
What will happen if the option segment stock is not cut the position till the stock expires ?
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
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.
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?
Yes.
Sir, how can we determine whether a stock is more volatile or less volatile?
Volatile is essentially the daily price range, the more the stock moves the more volatile it is.
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
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