Zerodha
Short delivery
Penalty
Penalty for short delivery on Zerodha
The penalty for short delivery on Zerodha (and any Indian broker) consists of:
- Auction price differential: Auction price - Your sell price. Typically 5-15% premium to LTP.
- Exchange penalty: Per SEBI framework; small percentage of trade value.
- Broker administrative fee: Some brokers (not Zerodha typically) charge additional fee.
Example cost
For a Rs 1,00,000 sell that short-delivered:
- Auction price: Rs 1,12,000 (12% premium).
- Differential: Rs 12,000.
- Exchange penalty: ~Rs 100-500.
- Total cost to seller: Rs 12,100-12,500.
That’s 12%+ of the trade value.
Why so steep
The auction is designed to:
- Ensure buyer gets shares (priority).
- Make short delivery costly to deter.
- Compensate buyer for inconvenience.
Avoiding
Verify holdings before placing CNC sell. See Short delivery and consequences .
See also
- Short delivery and consequences
- Short delivery cash settlement on Zerodha
- Cash-settled short delivery
- Auction settlement price on Zerodha
- Auction market on NSE / BSE
- How to cancel pending or partial auction orders
- Multiple offers at the same price in auction
- How to track previous auction trades on Console
- Short delivery on Indian exchanges
- Settlement cycle changes 2025-26
- T+1 settlement in Indian equity
- Direct payout to demat SEBI rule
- CDSL block mechanism for pay-in
- T1 above shares on holdings
- Sold stocks shown as negative positions
- BTST trading
- Kite Holdings tab explained
- Kite Positions tab explained
- Margin pledge (Zerodha)
- P symbol on holdings page
- Margin shortfall and auto-square-off
- Trade-to-Trade segment rules
- Margin shortfall penalty notice
- SEBI peak margin rules explained
- SEBI
- Zerodha customer care number
- Zerodha
- Kite (Zerodha)
External references
References
- SEBI, Short delivery penalty framework, sebi.gov.in.
- Zerodha, Short delivery handling, support.zerodha.com.