In our another article What can cause a Short Delivery? there has been a Short Delivery of 100 shares. When you sold those shares (Tuesday) there was someone on the other side who bought those shares. Because of short delivery he won’t get the shares.

So the exchange will purchase them in a buy-in auction market on T+2 day (Thursday) and give delivery of these shares to the buyer on T+3 (Friday).

 

See also:

What is Short Selling of shares?

What is Short Delivery?

What can cause a Short Delivery?

How does the auction process work in case of short delivery?

How does Internal Short Settlement work?

Comments

  1. Pingback: How does the auction process work in case of short delivery? - Knowledge BaseKnowledge Base

    1. TradeSmart

      Hello Sourabh,
      In case you have failed to buyback the shares then same shall be considered as short selling and it shall be settled through auction process. The auction price is decided by the exchange between the 20% upper & lower range of T+1day closing price (For Care Rating). And is based on price offered in the auction market, which is generally higher than the market price. Please refer to this link to know more.

Ask a question