Auction Penalty on WebNotes

How to fix an intraday position not auto-squared-off

Sun, 21 Jun 2026 00:00:00 +0000

An intraday position on Zerodha that is not auto-squared-off by the cut-off does not vanish; it converts the same evening into a delivery position under CNC or, in derivatives, a carry-forward NRML position. The square-off you rely on is a risk-management safety net the broker runs around 3:20 pm for equity MIS , not a guarantee, and Zerodha’s own policy states the onus of closing intraday positions stays with the client. When the net does not catch a position, the cause is almost always one of a small set: the scrip was illiquid or locked at a circuit , the order ran above the per-order quantity cap, or an exchange or RMS delay intervened.

MIS and CO positions when circuit limits are hit

Sun, 21 Jun 2026 00:00:00 +0000

When a stock locks at its circuit limit, an intraday MIS or cover order position on Zerodha usually cannot be squared off, because a circuit lock leaves only one side of the order book with no counter-orders to transact against, and the position then converts to a delivery trade carrying overnight risk, possible short delivery, and an exchange auction penalty. A circuit limit is the daily price band beyond which a scrip cannot trade; once price reaches it, the scrip freezes there until orders appear on the opposite side or the band is revised.

Physical delivery risks in stock F&O

Sun, 21 Jun 2026 00:00:00 +0000

Overview

Physical delivery risk in stock F&O is the exposure a trader carries when a single-stock futures or in-the-money stock option position is held into expiry and converts into an obligation to take or give delivery of the underlying shares at full contract value. The hazard is the gap between the small premium that prices an option and the large contract value behind it: a long in-the-money call bought for a few thousand rupees can become an obligation to pay several lakh rupees and receive the entire lot (NSE Clearing physical-settlement framework). Stock derivatives on the National Stock Exchange have been physically settled since October 2019; index derivatives are cash settled and carry none of this risk.