I purchased 1600 shares of JAYKAILASH on 1st April at 11.11, and sold them on 2nd April at 11.40. Now I got email regarding short delivery intimation on 2nd April at 10.25PM. Yesterday, 7th April, I got another email containing auction contract note in which 1600 shares were purchased @13.60.
Now my question is that the shares which were purchased on 1st April, they should have gone to auction too. Did zerodha made attempts to sell them in auction on 6th april or 7th april.
Secondly, if they could not be sold in auction, then shouldn’t I be getting 20% more than settlement price as auction could not happen. And why I am given delivery of the shares despite these two things.
Thirdly, in T+1 Settlement, at what time does the delivery of shares takes place. Is it during market hours or after market hours?
I don’t want delivery of shares. And short delivery hasn’t happened for first time. Usually the purchased shares are sold in auction or cash settled by 20% above the price. Kindly clarify why I was given delivery of shares
You bought shares from someone (Seller A), and that seller failed to deliver. So exchange arranged shares via auction to give you delivery.
At the same time, you sold those shares to someone else (Buyer B). But because of the settlement holiday, your shares were not yet credited. So from the exchange’s view, you failed to deliver to Buyer B.
Because of that, auction was done for your short delivery (your sell side), and shares were bought at ₹13.60 and given to Buyer B. That cost came to you.
Your bought shares don’t “go to auction” because you are the buyer there. Auction is only for the side that fails to deliver.
You didn’t get 20% cash because auction succeeded. That rule applies only if auction fails.
You got delivery because exchange managed to arrange shares and if shares are available, they will always deliver them.
Shares in T+1 are credited after market hours.
In short: seller failed to give you shares, and you (due to holiday timing) failed to give shares to the next buyer and the loss is calculated on your side.
I get why this feels unfair, but the rule is the same for everyone you’re just seeing two sides of it.
When Seller A failed to deliver to you, it did go to auction. That auction was done to arrange shares for you so you can receive delivery.
When you failed to deliver to Buyer B, it also went to auction but this time to arrange shares for Buyer B.
So auction happens in both cases. The difference is:
In your buy transaction, auction is done to give you shares
In your sell transaction, auction is done to take money from you and give shares to the next buyer
You’re involved in both chains:
As a buyer (you benefit from auction)
As a seller (you pay for auction)
In your case, auction succeeded on your sell side (₹13.60), so that loss came to you.
So rules are consistent it’s just that you were on both sides of the system at the same time, and the loss shows up where delivery failed from your end.