Raghunandan Money – Investment Khushiyon Ka.

RMoney Support

How can we help you?

Search for an answer or browse help topics

What Happens to My Intraday (MIS/CO) Position if the Stock Hits the Circuit Limit?

Post Date : April 29, 2025

Intraday orders such as MIS (Margin Intraday Square-off) and CO (Cover Order) allow traders to take leveraged positions, enabling them to trade with up to 5 times the capital available in their account. These trades are intended to be squared off within the same trading session.
However, in certain situations, such as when a stock hits its circuit limit (upper or lower), square-off may not be possible. This can lead to significant implications for the trader.

Understanding Circuit Limits
Circuit limits, also known as price bands, are the maximum permissible movement (upward or downward) in the price of a stock during a trading day. These limits are imposed by the exchanges to control volatility and prevent extreme price fluctuations.
When a stock hits the upper circuit, it means there are only buyers and no sellers in the market. Conversely, when a stock hits the lower circuit, there are only sellers and no buyers.

Impact on Sell Positions When Stock Hits Upper Circuit
Scenario: A trader has taken a short position using MIS/CO and the stock hits the upper circuit limit.
Explanation:
Since there are no sellers in the market, the trader will not be able to buy back the stock to close the short position. As a result, the intraday position is converted into a delivery sell trade.

  • If the trader holds the stock in their Demat Account, the shares will be delivered to the exchange without issue.
  • If the shares are not held, the trade results in a short delivery. In such cases, the exchange conducts an auction to procure the shares for settlement.

Consequences of Short Delivery:

  • An auction penalty may apply depending on the auction settlement price.
  • A margin amount equal to 120% of the stock’s closing price is blocked until auction completion, with a narration such as “Short delivery margin blocked for sale of <scrip name>.”

Impact on Buy Positions When Stock Hits Lower Circuit
Scenario: A trader has taken a long position using MIS/CO and the stock hits the lower circuit limit.
Explanation:
Due to the absence of buyers, the trader cannot sell the stock to square off the position. In this case, the position is treated as a delivery buy.

  • If sufficient funds are available in the trading account, the stock will be debited and delivered to the client’s Demat Account.
  • If there are insufficient funds, the client must either transfer the required funds or liquidate existing holdings to cover the shortfall.

If no action is taken:
RMoney may sell other holdings to recover the required funds or take appropriate action to limit risk exposure.

Key Takeaways

  • Intraday positions using MIS/CO are subject to market liquidity and circuit limits.
  • If a position cannot be squared off due to circuit limits, it is automatically converted to a delivery trade.
  • In the case of short delivery, penalties and margin blocks may apply.
  • In the case of buy positions, insufficient funds can lead to forced liquidation of holdings.

Need Help?
Contact RMoney at 0562-4266600 / 0562-7188900 or email us at
askus@rmoneyindia.com

Sign up

To know about our offerings - Demat, Shares, Mutual Funds, IPOs, Insurance, Commodities and more…

Open an RMoney Online Account

Get started today to really enjoy your trading experience. Fill in your details, connect your bank account & upload your documents.

Open Trading Account

×

Update Your Nomination Today!

Ensure the security of your investments by updating your nominee details in your trading & demat account online. It’s quick and hassle-free!

📌 Act Now to Stay Compliant

👉 Click Here to Update Now 👈

For assistance, contact our Customer Care at 0562‑4266666 and email askus@rmoneyindia.com.

×

Filing Complaints on SCORES (SEBI) – Easy & Quick

  1. Register on SCORES Portal (SEBI)
  2. Mandatory details for filing complaints on SCORES:
    1. Name, PAN, Address, Mobile Number, E-mail ID
  3. Benefits:
    1. Effective Communication
    2. Speedy redressal of the grieva`nces

https://scores.sebi.gov.in/dashboard

IT'S TIME TO HAVE SOME FUN!

Your family deserves this time more than we do.

Share happiness with your family today & come back soon. We will be right here.

Investment to ek bahana hai,
humein to khushiyon ko badhana hai.

E-mail
askus@rmoneyindia.com

Customer Care
+91-9568654321

×

Ab Trade Karo Tension Free

Don't worry, we hate spam as much as you do!

Please note that the brokerage charged against the above scheme should not in any ways exceed the amount as specified under the exchange bye laws.

  • Advance Brokerage is valid for Lifetime.
  • Balance Advance Brokerage can be refunded lifetime without asking any Question.
  • Pay Rs 299/- & Get Rs 499/- as advance Brokerage revesal*
  • Send Enquiry
    Open chat
    RMoney India
    Welcome to RMoney
    More Info visit at https://rmoneyindia.com/support/what-happens-to-my-intraday-mis-co-position-if-the-stock-hits-the-circuit-limit
    How May I Help You?