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Trading may be a long-term investment that gradually produces high returns or a short-term strategy with quick gains. One such short-term method is intraday trading or day trading.
If you have a Upstox Free Demat Account, you must be wondering about what a Square Off is? No worries, here we are going to cover this topic and will clear your doubts.
Squaring off is a part of day trading that simply means closing all open positions by the end of the trading day.
Hence, if someone has bought, he must sell and if someone has sold, he must buy before the market closes.
Square Off Meaning in Upstox
Whether we talk about Square off in Upstox or any other trading platforms, square off the position directs towards completing the transactions.
This means whatever shares you bought for intraday trade in the morning must be sold before the market close. If in case, you skip selling of those stocks or shares, your broker (here Upstox) will sell it instead of you.
Upstox executes the square off at 3:15 PM.
How to Square Off Holdings in Upstox?
Squaring off the existing trade, placing a Sell order for a Call or Put option is all the same in trading.
It can be done simply in Upstox by using the Upstox Pro app.
As the app is used to place the BUY order for call option by clicking on the option ‘Ask Price‘ adjacent to the strike price similarly one can place a SELL order by hovering the mouse on the ‘BID Price’ column of the strike price.
On clicking the button the order form appears on the screen. Mention the details asked and click on the SELL button.
All the equities and F&O positions are squared off automatically at 3:15 pm.
While the square of time for currency futures is at 4:45 pm.
The MCX positions are squared-off 30 minutes before the market closure. Thus their square-off time is between 10:30 pm to 11:25 pm.
All these are also known as auto square off because, at the stipulated time, the currently held positions are closed/squared off automatically.
If you fail to close your open positions before the above mentioned time, the system will take over and square off automatically at the existing market rate. Thus, to avoid this ensure to close your positions beforehand.
Upstox Square Off Charges
If your open positions are auto squared off by Upstox, you will be charged ₹20 (plus 18% GST) as auto square-off charges per order.
Squaring-off is done by Upstox’s RMS team at usual intraday square-off timings.
Therefore, to avoid auto square-off charges, make sure to square-off your positions before. Also, you must have a stable internet and a good time margin while squaring-off your open positions.
To avoid auto square-off charges on Upstox, it is essential to know the market timings. The market opens at 9:00 am and you can start trading in cash, equity, futures, and options from 9:15 am.
Therefore you can square off your positions at any time before 3:15 pm. This will not only avoid auto square-off charges but also ensure profitability (as auto square-off happens at the existing market rate which may or may not be profitable for the trader).
Square Off For MTM
The square off percentage for MTM i.e. Mark To Market is determined by Upstox’s Risk Management team.
If the MTM in Upstox shows the availability the cash margins breaches 50% to 80%, the client’s complete position is squared off by the RMS. Further, in such cases, no intimations/calls are made to the client.
It is best to have enough time in hand while carrying out intraday trades. Not only does it ensure desired profits but it also prevents paying unnecessary charges.
Besides, make sure that the device (mobile, laptop, PC)through which you are trading is updated and is connected to a stable network.
Hope this article made things clear about square-off on the Upstox platform. Happy trading!