During the auction session, the exchange invites offers from fresh sellers for shares that are short delivered. A short delivery happens when the exchange is unable to deliver shares purchased to the demat account because the seller of the shares failed to do so.
The auction usually takes place after 2:30 PM and lasts only 30 minutes. Only shares settled in the demat account can be sold during the auction. T1 quantities cannot be sold. Also, shares cannot be bought in the auction as the exchange is the buyer. The
circuit limits
for the stocks in the auction market is set at 20% from the previous close.
To participate in the auction market, follow these steps:
- Login to Kite.
-
Click on Bids.
-
Click on
Auctions.
-
Hover over the share and click on
Sell.
-
Click on
Sell at auction,
enter the quantity and the price and click on
Sell.
Exchanges don't allow order modifications during the auction. Instead, the order must first be cancelled, and a new order with the updated price and quantity must be placed during the auction session. To learn more, see
Why can't pending or partially filled auction orders be cancelled?
Things to keep in mind
-
If you have sold stocks through auction orders, you can still purchase the same stock in the regular market on the same day. However, this will be considered a new trade with a fresh settlement cycle and will not reverse the auction sale, provided you have sufficient margins in your account.
- The auction markets will remain closed on the settlement holidays.
- Zerodha does not allow clients to place sell orders for pledge stocks in the auction market due to the risk of short delivery.
- There are no extra charges for participating in the auction market. Auction orders are treated as regular equity orders. To know the applicable charges, see What is the brokerage at Zerodha for equity?
-
DP charges
will be levied twice if a stock is sold in both normal market hours and the auction market due to separate settlements.