Auto Square-Off
The broker's automatic closing of an intraday or margin-deficient position when a cut-off time or a risk threshold is reached.
How it is identified
Test: the broker's risk system closes the position without client instruction, on time or on a margin shortfall
Unit
qualitative
In depth
Auto square-off protects the broker, not the client: it fires at the broker's chosen time, typically around 15:15 to 15:20, and at market prices with no regard for whether the trade is momentarily unfavourable. Brokers also levy a charge for it, so leaving positions to be squared automatically is more expensive than closing them yourself. On a margin shortfall it can fire at any time, which is how leveraged traders discover that their position was liquidated at the day's worst tick. Assuming a losing intraday position can simply be carried overnight is precisely what auto square-off prevents.
Worked example
An intraday long is auto-squared at 15:15 at ₹486 during a brief dip; the stock closes at ₹497. The forced exit cost ₹11 a share plus the broker's auto square-off charge, entirely because the position was left to the deadline.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Auto Square-Off” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.