Established in the year 2010 with the headquarter Bengaluru, Zerodha is an Indian Financial firm. It offers brokerage services in various currencies, commodities and stocks. It is particularly well-known for providing brokerage services at very low cost.
In this article, we will explain to you about Zerodha square off time in detail. Understanding square off time is very essential as it will help you make the right decision at the right time, avoiding losses.
A lot of investors and traders avoid this crucial aspect of trading. Ignorance of this information might lead to a severe loss that has to be incurred by the trader or investor. To make sure you don’t fall prey to the same problem, keep reading this piece of information.
Table of contents
What is Square off Time?
Square off time is the process at which the trader or investor buy or sell any share, commodity or currency. In short, the time at which any financial decision is taken is called Square-off Time.
Let’s understand this with a simple example. Suppose a trader buys a share at INR 110. Now the share price reaches 104, and he wants to exit his position. The moment at which he executes the process of selling the share is called Square-off time.
In a similar fashion, if a trader invests in via Zerodha, doesn’t want to stay invested in the particular share or commodity or currency, the will exit his position. This process is called Zerodha Square-Off.
System of Zerodha automatically squares off the position of the trader at the end of the same day in case the person has short sale sold a borrowed share has not closed the position himself.
Zerodha Auto square off time.
Initially, the square off time of Zerodha was 3:15 p.m on the trading days. But later, it was extended to 3:20 p.m.
What it means is, once this time is reached, there is no way you can buy, sell or modify your existing orders. In case of Zerodha, if the trader does not have sufficient amount for the margin fixed by the exchange in his DP account, Zerodha’ s system automatically squares-off all the open positions a trader holds.
This can turn out to be a major issue. Suppose you are holding one stock which is about to break out from here and is going to help you make a profit in the next few trading sessions. You also bought another stock but didn’t have sufficient fund in your DP account. To compensate the pending amount, Zerodha will square off your previously held positions.
Zerodha does not offer any intimation before squaring off your position. If the losses are not evened by squaring off the open positions, the pending amount has to be paid by you.
Zerodha Commodity Square off
As mentioned initially, Zerodha is a brokerage firm that offers services with multiple commodities like Gold, Silver, Crude Oil and copper. The square off rule is applicable to these commodities too.
The Zerodha square off timing for commodities is 25 minutes before the market close. That means, the trader can alter his positions in the commodity market prior to 25 minutes of closure. ‘Once the square off time kicks in, the commodity trade will be closed by the Zerodha system.
Zerodha Currency Square off
Along with equity, commodity zerodha also offer trading services in currency. Zerodha is one of the largest broker for currency transaction. Zerodha auto sq-off time for currency segment is 4:15 pm.
Note: Currency Market Time: 9 am to 5 pm
Zerodha Square off Timing for Intraday
The closing time for Intraday in Zerodha is 3:20 p.m. This time is fixed after a lot of deliberation and study by the Risk Management Tem of the company.
As you are aware that intraday trading is a trading in which the stocks are bought and sold on the same day. The trader cannot carry his open positions to the next day. This means if h has bought stocks, he will have to sell it, and if he has sold stocks, he will have to buy it at the end of every trading session.
The last hour in the market is called the closing hour of the market. At this time, due to a large number of squaring-off by the traders, the market is highly volatile.
If the trader fails to close his positions due to any reason, the automated system of Zerodha will close the position by itself.
It is vital to note that although the square off time is 3:20 p.m, some positions might be closed until 3;24 due to system issues.
If in case, the automated system fails to square off the position due to any reason, the system considers that trade as the Cash and Carry. This means, the position is no longer intraday and is carried forward to the next day as a delivery product.
If there is no sufficient amount in the trader’s account for the delivery, position will be squared, and the loss has to be sustained by the trader. Zerodha does this without any margin call.
Zerodha Square Off time for MIS (Margin Intraday Square Up)
For all the Zerodha BO, CO and MIS, the closing is at the end of the day. For MIS, the closing period is 3:18 p.m. All the positions are automatically squared-off after the pending orders are cancelled. The trader can make his decision before this squaring off time, i.e. 3:18 p. m.
Let’s take a look at the square of time for various intraday product of Zerodha.
|Closes from 3 : 20 p. m.||25 minutes prior to the market closure||Closes from 3 : 20 p m||Closes from 4 : 45 p. m.|
As discussed above, it is vital to have a fair time margin for squaring off your positions. If you allow the system to do that for you, you will be making a lot of loss. Ensuring a good time margin allows you to take buy and sell a call at your own and you will get desired results.
Overall, Zerodha is the best platform for trading, given that you keep these things in mind. Happy Trading!
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