What will happen to my (Intraday/Long-term) position in case the stock circuit limits are hit?

Intraday vs. Delivery (Long-Term) Trading - Important Guidelines

Clients can take positions in two ways based on their trading style: Intraday or Delivery (Long-Term).

• Intraday Trading: Positions must be squared off on the same trading day.
• If not squared off by the client, 021 Trade may close the open positions before market close as per the cut-off timings defined in the RMS Policy.

Risks in Intraday Trading

Intraday trading involves leverage, which increases both potential returns and risks.

In certain situations—such as when a stock hits its upper or lower circuit limit you may not be able to exit your position. This can lead to:

• Conversion into delivery (overnight position)
• Margin shortfall
• Auction penalties

Example 1: Short Sell Position & Upper Circuit

• You sell 500 shares of TMPV at ₹300 under intraday.
• The stock hits upper circuit at ₹330, and only buyers are available (no sellers).

*Result:

• You cannot buy back shares to close your position.
• The trade converts into a delivery position.

Outcomes:

• If shares are available in your demat account → They are delivered to the exchange.
• If not → It becomes a short delivery case.

Auction Process:

• Exchange conducts auction on T+1 day
• Shares are delivered to buyer on T+2 day
• 120% of stock value is blocked as margin under:
  “Short delivery margin blocked for sale of TMPV”

* Example 2: Buy Position & Lower Circuit

• You buy 300 shares of HDFC Bank at ₹800 under intraday.
• The stock hits lower circuit at ₹720, and only sellers are available (no buyers).

* Result:

• You cannot sell the shares.
• Position converts into a delivery trade.

Outcomes:

• If sufficient funds are available → Shares are credited to your demat account.
• If funds are insufficient → You must:
  • Add funds, or
  • Sell existing holdings

If no action is taken, 021 Trade may sell your holdings to recover the shortfall.

→ Key Takeaways

• Always square off intraday positions before market close
• Monitor circuit limits and liquidity risks
• Maintain sufficient margins/funds
• Avoid unintended delivery and auction penalties