Table of Contents
- 1 Can I convert my intraday short sell to delivery?
- 2 What will you do if you are short of shares to deliver?
- 3 How much is the fine for short delivery?
- 4 Can we buy and sell delivery shares on same day?
- 5 When do I have to make the delivery of the shares?
- 6 Who can sell shares that are short delivered in the auction?
Can I convert my intraday short sell to delivery?
Here you have to be careful that you can only short sell intraday. That means if you sell a stock in the morning and you cannot give delivery then you need to necessarily cover your position (buy it back) before end of trade on the same day.
Can we carry forward short selling?
You cannot carry forward the short position for multiple days. To understand why shorting in the spot market is strictly an intraday affair we need to understand how the exchange treats the short position. When you short in the spot market, you obviously sell first.
If you expect the stock price to go up, the choice is quite simple. You either buy the stock for delivery and hold it in your demat account or you buy the futures, if available in F&O….Once you short sell a stock, there are three possible scenarios.
- You sell the stock and it goes down.
- You sell the stock and it goes up.
How fast can you sell a stock after buying?
You can sell a stock right after you buy it, but there are limitations. In a regular retail brokerage account, you can not execute more than three same-day trades within five business days.
How much is the fine for short delivery?
If short/non-collection of margins for a client takes place for more than 5 days in a month, then penalty of 5\% of the shortfall amount shall be levied for each day, during the month, beyond the 5th day of shortfall.
When we can sell delivery shares?
The key feature of delivery trading is actually getting the shares transferred to your demat account. That is it! It does not matter how quickly you sell the stock back; there is no time limit for selling of stocks. As long as you get the stocks delivered to your demat account, it is considered to be a delivery trade.
You can buy shares and sell them on the same day. Please note that buying needs to be done in the morning session for intra-day trading and not during the last 1-2 hours of a trading day. You can do intra-day trading for a company shares by buying it and then selling it within few hours.
What happens if you short sell a stock for delivery?
Hence it is very important that you short sell a stock for delivery only if you have it in your demat account or you could end up paying a considerable amount of money as Auction penalty. a) On T Day Mr. X sells the stock. b) On T+2 Mr. X fails to deliver the stock.
No matter what, you have to make delivery of the shares on the prescribed settlement day (T+2) which you have sold on the transaction day (T day).
What happens if I sell some stocks on T Day?
As mentioned earlier, if you sell any stock on T day, you are obligated to deliver the shares on T+2. But sometimes it may so happen that you sell some stocks but these stocks are not present in your demat account and hence you would not be able to give delivery of these stocks on T+2 and would end up defaulting.
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 defaulted (short delivered) to take part in the auction. Let’s examine the auction process: