Hi,

Can someone please help me understand this?

Suppose on 1st jan'15, there were 1000 "Total Traded Quantity" of Company A.

The delivery Quantity that day was 300 Shares.

1) So, what happens with the rest 700 shares?

2) Suppose I buy 200 shares intraday in morning and the trade get squared off in afternoon automatically, then it means i Sold forcefully, but Who bought? I mean who is the owner of those 200 shares after they are Squred off?

3) In this example can we say the Real / True supply was 1000 Shares but Demand was Only 300 Shares? OR is it like that the Real/ True Supply was 300 shreas??

Please help me understand this.

It is simple. When a trade takes place the buying and selling quantities are matched. A trade will not go through if there are no shares to match the demand in either direction. It does not matter whether the quntity sold/bought is actually available in the Demat A/c. That means, the total traded quantity is not matched or verified with available quantity in Demat A/c. But, for delivery, the quantity sold has to be available in the Demat A/c which is verified by the Broker before sending the order to exchange. So, deliverable quantity is always matched with the available quantity in Demat and therefore for deliverable quantity there is always an owner of the shares.

In case of intraday trades where the trade has to be squared off, there is no verification of quantity available in Demat. Only the quantity sold and quantity bought are matched. Therefore, there is no owner of the shares but only buyer and seller are there. So, for every completed trade the quantity is always matched and therefore, quantity sold equals quantity bought. Therefore, at the end of the day when the auto square off takes place, the pending bought volume is already matched with the sold volume which means equal number of sold shares are also pending. Therefore, in auto square off these pending quantities match and net pending volume at the end is zero. So, there is no question of ownership. The demand - Supply are equal at the trading time itself. So, there is nothing like true demand/supply.

-Anant