What happens if my intraday equity short position isn't closed by end of day?
When you engage in intraday equity trading, it's crucial to understand the implications if short positions aren't squared off by the day's close.
Understanding Short Delivery: In instances where your intraday equity short position remains unsquared due to a lack of buyers or other reasons, it leads to short delivery. This means you, the seller, have failed to settle the shares, which pushes the exchange into action.
The Role of the Exchange: On T+1 day, the exchange organizes an auction to acquire the required number of shares, which are then delivered to the buyer.
Potential Causes of Short Delivery: Short delivery might arise when a stock has limited liquidity or, under certain circumstances, if an intraday equity position isn't squared off. This can lead to margins being temporarily blocked in your account. These margins will be released once the T+1 auction settlement concludes.
Note: You'll receive notifications about such developments. You'll be informed through both SMS and email.
For a more detailed perspective on short delivery, you can refer to this article.
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