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Auto Square off Facility

Square off is a feature of trading where a trader buys or sells stocks for a day with the hope of gaining the profit. The traders should close the positions by the end of the day. Some brokers provide auto square off facility where they automatically square off the positions at the specified time.

Zerodha (Flat Rs 20 Per Trade)

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Auto square off will be of two types: Timer base & MTM base.

  1. Timer Base:

 In Timer based Auto Square Off, Square off will be done on a predefined time. Pre Square off mode will be @ 3.00 pm and Auto square off @ 3.10 pm without giving any preference for Profit or Loss. 

Key Features of Timer Base Auto Square Off:

  • All Margin / Intraday position created in Equity & FNO will be squared off irrespective of the Limit/credit available.
  • At Pre Square off Mode Client can square off the position but cannot create a new position and all pending orders will remain till Auto Square off time. During Auto Square off Mode all Pending orders with Product type Margin will be Cancelled and no new position will be created in Margin Product. 
  • New position can be created with product type Delivery only to the extent of Limit/Fund available.
  •  A facility of Position conversion available from Margin to Delivery to the extent of funds available. Position converted to Product type Delivery will not be squared off.
  1. MTM Base:

 In MTM Base Square Off, Square will be done after calculating the MTM Loss in Equity and FNO segment of a particular client. 

Key Features of MTM Base Auto Square Off:

  • Only Booked Profit will be considered while calculating MTM Loss. 
  • Pre-square off percentage set at 70% and Auto Square off at 80%.
  • During the Pre Square off mode, only Delivery order will be accepted to the extent of funds available and pending orders will remain till Auto Square-off triggers.
  • Once MTM triggers Auto square off %, all Pending orders will be cancelled; no fresh orders can be placed except Delivery to the extent of Limit/Fund available.
  • All Open Position will be squared off irrespective of the Segment either Cash or Future position.

E.g. Client ABC Fund status

Limit set: 10000

MTM Limit set: 90% of the funds -9000

Pre- Square off Alert: 6300 (70 % of 9000)

Auto-Square off: 80 % 7200 (80% of 9000)

Answered on

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