Gurus,

I have a doubt, I manage to buy some X share as intra-day. And I will sell it end of the day at the market price, will there be for sure a buyer or if there is no buyer how am I going to close my position. How will my broker play in squaring off? Or if no one buys will I have to carry forward? Can I BTST?

Not sure if these questions make sense.

Thanks.

If you are trading on the NSE, you will find a buyer in most cases.

Almost all NSE-listed stocks have buy orders. (Some illiquid stocks get buy orders only after first few minutes of trading).

(Many illiquid BSE stocks have no buyers at all).

In case of NSE, only exception can be when the stock hits the lower circuit.

If the stock hits the lower circuit, you will have to take delivery of the shares.

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You can sell the next day if your broker permits BTST.

Some brokers don't allow BTST and clients can sell shares only after the shares are credited to the client's demat account.

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A few online brokers square-off open intra-day positions around 3 PM.

Your broker may or may not do this.

It entirely depends on his policies.

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So I can play safe with illiquid shares over NSE till it doesn't hit the lower circuit?

Also can You please tell what is the basic principle in trading at BSE/NSE. Is it just like trading at two different firms or something more than that?

Thanks for the info.

Day trading in illiquid stocks is never easy and you should first start with a very small capital.

There is 99% probability that if you trade with all your capital everyday, you will lose 80% of your capital within 1 year.

BSE and NSE are two different markets.

NSE's listing requirements are much more stringent compared to those of BSE.

Stocks that are listed only on BSE are usually avoided by institutional buyers.

Also NSE is a better service provider and so volumes on NSE are much higher compared to BSE.

Thus, BSE-only stocks tend to be less liquid.

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Thanks for your insight.

Just one more question, If a scrip hits the lower circuit, as you said I would need to take it home, is there anything like the trading will start again in few hours or just the next day for this scrip.

And if the broker allows can I simply sell it the next day?

Thanks.

Yes you can sell next day. But in case of short delivery (very rare but can happen sometimes), then you may have to face the auction.

When a stock hits lower circuit: It means that there are no buyer for the scrip, you can still put your sell order as soon as some buyer comes, the sell orders get executed in sequence of order placed.

Such illiquid scrip, may not give chance to get out for many days in continuation (Lower circuit in continuation).

When a stock hits the lower circuit, it doesn't mean that trading is stopped in that particular stock.

It only means that there are no buyers left in the permissible range.

If any buy orders come, trades will happen.

e.g.

Assume a stock had closed at Rs 100 on previous day and has a price band of 20%.

The lower circuit limit will be Rs 80.

If the lower circuit is hit at Rs 80, it will mean there are no buyers at Rs 80 and above.

Some people may be willing to buy at Rs 79, but as that price is outside the day's permissible range, a buy order can't be placed at Rs 79.

If someone gives a buy order at Rs 80 (or above), his order will be executed.

Usually, after a stock hits the lower circuit, very few buy orders come and stock remains in the lower circuit for rest of the day.

In rare cases, buying emerges, the circuit "opens" and the stock price moves above the lower circuit limit.

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If your broker allows it, you can sell a stock on the next day.

As rajivka said, there is a minuscule probability of you getting a short-delivery.

If you don't get the shares, you won't be able to deliver the shares and thus will have to face an auction.

There are many threads about the auction process on this forum. Do check them.

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Thanks Rajiv, Ashish & Sachin.

I have read somewhere on the forum that on NSE the order will be executed or canceled and on BSE the order will be executed or converted into limit order.

I'm confused on this, is this for some cases or for all.

If I place a buy order at @10 where as the market price is 11. Will this stay in the queue or will it be converted/canceled?
Please explain or correct if I;m wrong.

Thanks.