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.