What happens if my intraday equity short position isn't closed by end of day?
If you initiate an intraday short sell in equity and fail to square it off before market close, it can result in short delivery—a situation where the exchange must intervene to fulfill the trade.
What is short delivery?
- You sell shares without holding them in your Demat account
- You do not buy them back within the trading day
- You are unable to settle the trade, prompting the exchange to step in
What happens next?
Why might this happen?
- Low liquidity in the stock
- Circuit limits preventing order execution
- Forgetting to square off intraday short positions manually
To avoid auction penalties, always ensure intraday short positions are squared off before 3:15 PM.
What if...
| Scenario | Outcome |
|---|
| I forget to close an intraday short | The exchange conducts an auction on T+1 and charges may apply. |
| There’s no liquidity in the stock | Your order might not be filled, leading to short delivery. |
| I receive a short delivery alert | It means settlement is pending and will be resolved post-auction. |
Reference
Last updated: 24 Jun 2025
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