If your Intraday short isn't covered and becomes a short delivery, the shortfall goes to the exchange auction, and the cost is debited to your account. Here's the timeline and what it costs.
When is it settled?
- The shortfall goes to the exchange auction on the next trading day (T+1).
- The auction bill is posted on T+1.
What will I receive?
You'll get a contract note by email — a single, common contract note covering the settlement, so you can see the charge and its breakdown.
What does it cost me?
Your account is debited the cost of the short delivery:
- the auction price — the price at which the shares are bought in the auction — or the close-out price if the auction can't source the shares, plus
- the penalty and related charges.
Because a stock at its upper circuit keeps rising, the auction or close-out price can be well above the price you sold at — so your loss can be larger than it looked when the market closed. For the exchange-side mechanics of the auction and how the close-out price is set, see how the auction process works when there's a short delivery.