How Auction works in case of BTST?

How Auction works in case of BTST?

Clients buying shares and selling the same on the next day or day after is known as BTST trades (Buy Today Sell Tomorrow). These trades are prone to auctions. For example, if client ABC buys 100 reliance shares on Monday and sells the same on Tuesday.

On Tuesday (T+1 settlement for Monday trades) if the seller doesn't give shares and defaults, then, on Wednesday (T+1 settlement for Tuesday Trades) the client ABC shall also default on his sell transaction.

For Mondays buy transaction client ABC shall get auction credit in his ledger, and his Tuesdays sell transaction default he will be charged with auction penalty.


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