Risk of short delivery in btst trade?


suppose i bought tatamotors 100 shares on monday in CNC (delivery)… and sold on tuesday (T+1) as i was making some profit in my BTST trade.

now, as i bought shares on monday it will be credited in my demat account on t+2 day i.e. on wednesday, and as i sold my shares on tuesday, it will be debited from my demat on T+2 day, i.e on thrusday.

now after buying shares, it shows in my holding as T+1, and T+2 till wednesday, but on thrusday i.e T+3, i receive a mail from zerodha regarding short delivery of 100 shares of tatamotors and will be settled in AUCTION on T+3 day if there is a seller available.

so on thrusday i dont have 100 shares in my demat account but i have to give delivery of 100 shares on thrusday.

so in this case, will i have to pay auction penalty as i was not able to deliver the shares i sold on tuesday, that is bcoz i didnt get the shares which i bought on monday.

can anyone please share information for this kind of situation.

Yes, you will have to pay the penalty for Short delivery.

You can read more about Short Delivery here.

but if exchange conducts an auction between 2 -2.45 pm on t+3 day from buying day and credits the shares to my demat on auction day itself, then will it be settled as i have to deliver the shares on same day as i sold on tuesday.

then y penalty will be charged, as i got the shares from auction and delivered on same day .

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Doesn’t work this way.

When you sell shares, these are debited from your Demat by your broker, who in turn transfer these shares to Clearing Corporation, who transfer the shares to buyers broker pool account and then the broker transfers these to the buyer.

So when you are selling the shares your broker debits these from your Demat and gives it to Clearing Corporation by T+1 day, if there are no shares to debit, the transaction results in short delivery.

When you sell shares on Tuesday, the time within which you have to give delivery is by Thursday but the process of transfer begins much before T+2 day.

if the client has short delivery on the trade date (i.e. client doesnot have stock in his demat account) ; BUT , if the broker has stocks in his pool demat account (or personal or company demat account) ; can the broker save client from short delivery penalty , by giving the clearing corporation from his own account ?

there are few brokers , who try to save client , if such situations arise ; though rarely !

if transfer of process begins much before then y intimitation of short delivery is given on t+2 day evening… it should be given on T+1 day itself so that the buyer doesnt sell the shares as he will come to know that it will be short delivered from his side also if he sells it.

this has happend with my friend having account with zerodha, the only thing is he didnt sell the shares on next day which he was planning to do, as it fell down. and on T+2 evening he got mail from zerodha that shares are not credited to his demat as it is short delivered.

There is no way to know if Short Delivery is going to happen beforehand, that is why it takes time.

Take example of Cheque bouncing, when you are depositing Cheque, you don’t know whether it is going to pass or bounce until the whole process is complete, this too is similar to that.

Don’t think this can be done.