What is the auction, how does it occur?
An auction is a mechanism where the exchange auctions the investor's stock holding when the person has sold the stock but is unable to deliver it within a stipulated time period.
The exchange conducts an auction on T+1 day and on behalf of the defaulting seller, it purchases back the stock from the Auction Participant.
In most cases, if you short sell equity shares intraday and you cannot sell it due to an upper freeze, shares will go to auction.
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What is an auction?
An auction refers to the process where stocks that were not delivered by sellers in time are bought in the open market to meet the buyer’s demand. Auctions help ensure the market’s smooth operation and protect buyers from delivery failures. An ...
How is the auction conducted?
The auction is conducted every day between 2:30 PM to 3:15 PM. Only member brokers of the exchange can participate and sell shares that are short delivered. To avoid any conflict of interest, the exchange doesn’t allow members whose client has ...
What is a short margin? When will it occur?
When trades are performed without sufficient margin (for F&O SPAN and Exposure and for equity VAR+ELM+Adhoc), net buy premium, physical delivery margins, and marked-to-market losses (if applicable) as prescribed by the exchange. In case of a margin ...
What happens when I don't square off my short position?
In case your Intraday Equity short position is not squared off due to the absence of buyers or failed due to any reasons. This will be considered as short delivery, which means the seller of the shares has defaulted on the settlement of shares hence ...
What will happen if any stock reaches its upper or lower limit?
In case of short selling, if the stock is in the upper circuit, it will go in Auction and settle by the exchange on T+1 day, and in case of a buy position, it will go to your holdings.