Zerodha Short delivery

Short delivery and consequences

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When you fail to deliver shares for a CNC sell (short delivery), the consequences are:

ConsequenceDetail
PenaltyPer SEBI / exchange framework
Price differentialAuction price - Your sell price
ReportingTo exchange / SEBI
Repeated short deliveryBroker restrictions; account flag
CostCan be 20%+ of trade value

Penalty schedule

Number of short deliveriesPenalty
FirstAuction differential only
SubsequentHigher penalties; broker may restrict

Why short delivery happens

  • Selling shares not actually owned (mistake).
  • Selling pledged shares without un-pledging.
  • T1 confusion (selling shares not yet settled).
  • BTST that didn’t settle (rare).

Prevention

  1. Verify holdings in Console > Portfolio.
  2. Check pledge status before selling.
  3. Don’t assume T1 = sellable.
  4. For BTST, understand the risk.

See also

External references

References

  1. SEBI, Short delivery framework, sebi.gov.in.
  2. Zerodha, Short delivery handling, support.zerodha.com.

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The WebNotes Editorial Team covers Indian capital markets, payments infrastructure and retail investor procedures. Every article is fact-checked against primary sources, principally SEBI circulars and master directions, NPCI specifications and the official support documentation published by the intermediary in question. Drafts go through a second-pair-of-eyes review and a separate compliance read before publication, and revisions are tracked against the SEBI and NPCI rule changes referenced in the methodology section.

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