I want to ask about both cases.
A) When it’s a buy intraday order
B) When it’s a sell intraday order (Short selling with a negative share balance in the account)
What will happen in both cases?
We will try to square off but it is responsibility of client to close that position, for any reason if it is not squared off then
Next day it will be squared off if there is no enough cash, if money is available then it is upto client.
It will go for short delivery.
More on short delivery here.
Thanks. Just need slight more clarification regarding this.
So from my understanding, the default automatic action is square off. Maybe I ask why you might fail to square off the position?
What happens when a stock Hits lower circuit limit, exchanges halted the trading for that day and we are short on it(intraday)?
What consequences we have to encounter like short delivery?
Instances were intraday positions can be left open are when stocks hit circuits(longs are left open in case of lower circuit, shorts in case of upper circuits).
For F&O stocks trading in Equity, when stocks hit circuits, circuit limits are revised after a cooling period of 15 mins. For instance, today, ZEEL hit upper circuit after 3.15 PM and circuits weren’t revised. This would have left short positions open today as there were only buyers and no sellers at the circuit price
You can read this post for the consequences of short delivery.
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Under any circumstances, is it possible that zerodha offers the stocks (at a cost obviously) to clients to prevent a short delivery? Without reporting it to the exchange)
?
Nope.
@siva-reddy
Dear Zerodha please clarify the below from Intraday Equity 5x margin trading perspective not F&O- Index/Commodity/Stocks
Q1) if intraday equity long leverage position is not squared off (i understand the conditions), then next day its upto client to square off or if client has money convert to delivery however if this next day also on opening stock hits lower circuit and this happens for continuous 1-2 days then still client can keep holding the position and square off when the day allows?
Q2) In the above question - during this will client has to insert MTM losses in the account for every day ?
Q3) if intraday equity short leverage position is not squared off (I understand the conditions), then next day it goes for short delivery auction and client has to bear the losses, here my query is that- example shares sold on Monday, the auction happens on Tuesday, with the closing price of Monday used to determine the auction price. The price range of the auction is capped at 20% at the upper and lower end. this cap is on the closing price of Monday right?
1 - Please note that if a long intraday position is not squared off, it gets converted to a CNC position and is carried forward to the next trading day. If sufficient funds are available in your account, the stock will be delivered to your demat account. If there are insufficient funds, you can either add funds or sell stocks to cover the required amount. If neither of these actions is taken, the broker will sell the stock to recover the funds. You can refer to the support article for complete information.
2 - As the MIS position gets converted to a CNC trade, 100% margin needs to be available in the account to complete the transaction.
3 - Yes, the auction price is capped at +/-20% of Monday’s closing price.
Also note that if the auction price is lower than the closing price, then the closing price is used to calculate the auction penalty. The difference between the auction price and the closing price is transferred to the investor protection fund. You can refer to the support article for complete information.
Additionally, if the exchange is unable to procure shares in the auction market, then cash settlement happens at the close-out price. The close-out price is 20% higher than the stock’s settlement price on the auction day. You can refer to the support article for more information.
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