Lets say I sold Torrent pharma at 2600 Rs. and it expires in the money - and I don’t have any shares in my demat - and Zerodha ask for physical settlement so what will happen because I will be short ?
Not holding underlying shares in your Demat account will result in Short Delivery when your position is excercised, and will go to Auction. Appropriate auction penalties from the Exchange shall be charged on your account for such short deliveries. You can read more on Short Delivery here.
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