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What happens when I dont squared off my short position?
If your Intraday Equity short position is not squared off due to the absence of buyers or fails for any reason, it will be treated as a short delivery. This means the seller has defaulted on the settlement of shares. As a result, the exchange steps in and conducts an auction for the same quantity of shares on T+2 day (T being the transaction day, excluding holidays).
The settlement of the auction is completed on T+3 day.
Short delivery generally happens in stocks with low liquidity or if an Intraday Equity position remains unsquared due to specific circumstances. In such cases, appropriate margins are blocked in your account. The blocked amount will be released once the auction settlement is completed on T+3 day.
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