Missing your broker’s deadline can trigger auto-square off penalties, instantly eating into your daily profits. With retail investor participation hitting a record 18.75% in September, 2025, countless traders are potentially losing money to these avoidable errors. The solution is knowing the in-depth specifics of your intraday square-off time to ensure you exit positions manually before the clock runs out. Read this blog to understand the rules, specific broker timings, and how to avoid these unnecessary charges.
What Is Intraday Square Off?
Intraday squareoff time refers to closing an open buy or sell position before the market session ends on the same day. Since intraday trading requires settling positions to net zero, traders cannot hold shares overnight. If a trader fails to exit manually, the broker’s system automatically executes an auto square off at a specific cut-off time, ensuring the trade is finalised within the daily session.
Why Square Off Is Mandatory in Intraday Trading
Intraday trading operates on strict guidelines regarding margin and time validity, making the square off process essential for several crucial reasons, such as:
- Leverage and margin validity: Intraday trades utilise higher leverage provided by brokers, which is valid only for that specific trading day. Squaring off ensures this borrowed margin is released before the market closes.
- Prevention of overnight risk: Holding positions overnight exposes traders to unpredictable global news or market gaps. Mandatory square off eliminates the risk of adverse price movements when the market reopens.
- Avoidance of margin penalties: If a position isn’t closed, it may technically convert to delivery, requiring full fund allocation. Lack of sufficient funds can lead to severe margin shortfalls and penalties.
- Broker risk management: Brokers enforce square off to ensure liquidity and protect both the firm and the client from excessive losses due to volatility.
Intraday Square Off Time in India (Exchange Session Overview)
Although the official equity market session on the NSE and BSE concludes at 3:30 PM, brokers enforce an earlier square-off deadline to manage risk effectively, as detailed below:
- Official session closure: The NSE and BSE equity market sessions officially close at 3:30 PM, which is the absolute deadline for all intraday position settlements.
- Broker cut-off window: Most brokers initiate auto square off between 3:10 PM and 3:25 PM to ensure order execution before the market freezes.
- Segment variations: The timing often varies by segment; for instance, equity cash positions may be squared off around 3:20 PM, while F&O positions might be held until 3:25 PM.
- Circuit limit risks: If a stock hits a circuit limit (freezes due to excessive buying/selling) prior to the cut-off time, the auto square-off will fail. This converts the trade into a delivery position, forcing the trader to either pay the full stock value or face severe auction penalties.
Auto Square Off — What It Means
Auto square off is a mandatory risk management protocol where a broker’s system automatically closes any open intraday positions that a trader has not exited by the designated cut-off time. This mechanism ensures that all intraday trades are settled within the same session, effectively mitigating the risk of margin defaults and overnight exposure.
What Happens If You Don’t Square Off on Time
Failure to manually exit an intraday trade before the designated cut-off time triggers specific automated responses and financial implications, which include:
- Automatic market exit: The broker’s system instantly places a market order to exit the position, removing the trader’s ability to control the exit price.
- Penalty deduction: A specific call & trade or auto-square off charge is applied to the ledger per executed order.
- Slippage risk: Since the system exits at market price during high volatility, the final execution price might differ significantly from the last traded price.
- Margin blockage: The margin blocked for the trade remains frozen until the system successfully executes the square off, preventing new trades in the final minutes.
Auto Square Off Charges List
When a trader fails to close an intraday position manually, the broker’s system intervenes to settle the trade, which incurs specific administrative costs and taxes known as “Call & Trade” or auto-square off fees, including:
- Call & trade/admin fee: This is the primary penalty charged by brokers for executing the order on your behalf. Since the system or a dealer effectively performs the task of closing the position, a flat fee (typically from ₹20 to ₹50) is levied per executed order, regardless of the trade volume.
- Goods and services tax (GST): The administrative fee mentioned above is classified as a service, attracting a mandatory 18% GST. For example, if the square-off charge is ₹50, the total debit from the account will be ₹59 (₹50 + ₹9 GST).
- Slippage costs: While not a direct fee, auto square-off orders are invariably executed as market orders rather than limit orders. This means the trade is settled at the prevailing market price, which can be slightly unfavourable compared to a planned exit, resulting in an indirect cost known as slippage.
Best Time to Exit Intraday Trade
Timing is the most important asset in intraday trading, and identifying the best time for intraday trading exits window ensures that traders capture maximum movement while avoiding the volatility traps that occur near market closing, as follows:
- Morning momentum (9:30 AM – 11:00 AM): This period witnesses the highest liquidity and volume as the market reacts to overnight news and opening sentiment. Exiting here allows traders to book profits on the initial volatility before the stock price settles into a consolidation phase during midday.
- European market open (1:30 PM – 2:30 PM): The opening of European markets often triggers a second wave of volatility in Indian indices. Traders holding positions through lunch often find this the ideal window to exit before the chaotic final hour of trading begins.
- The safe zone (Before 3:00 PM): Professional traders strictly advise closing all intraday positions by 3:00 PM. Exiting before this threshold eliminates the risk of getting caught in the broker’s auto square-off window (usually 3:10 PM–3:25 PM), ensuring you control the exit price rather than the RMS system.
Tips to Avoid Auto Square Off
Traders can prevent unnecessary penalties and retain control over their exit prices by adopting simple discipline and utilising platform features, which include:
- Set hard stop losses: Always place a Stop Loss (SL) or Stop Loss Limit (SL-M) order immediately after entering a trade to ensure automatic exit at a predefined price.
- Use alarms: Set a recurring phone alarm for 3:00 PM as a reminder to review and manually close all open intraday positions.
- Convert to delivery: If you have sufficient funds, convert the MIS (Intraday) order to CNC (Delivery) before 3:10 PM to hold the stock overnight and avoid square off.
- Check margin utilisation: Ensure you are not over-leveraged, as a sudden dip in available margin can trigger an early auto square off by the broker’s RMS.
- Avoid circuit stocks: Refrain from trading intraday in illiquid or “circuit-to-circuit” stocks, as you cannot square off if the stock hits a limit and trading freezes, leading to mandatory auctions.
- Monitor internet stability: Make certain you have a mobile data backup ready, as technical disconnections during the final 15 minutes of the session are a common cause of accidental auto square-offs.
Penalties & Additional Charges If Square Off Missed
Missing the square-off deadline can lead to complications far more expensive than a simple brokerage fee, especially if the trade involves short selling, as detailed below:
- Auction penalty (short delivery): If you short sell a stock and fail to buy it back (square off), the exchange conducts an auction to buy shares for the buyer, charging you the difference plus a heavy penalty.
- Close-out charges: In the absence of sellers in the auction market, the trade may be closed out at a significantly higher price (e.g., the highest price of the day + 20%), causing massive losses.
- Interest on debit balance: If a buy position is converted to delivery (MTF) due to non-closure but you lack funds, brokers charge high-interest rates (18%-24% p.a.) on the unpaid amount.
Real Example — Auto Square Off Cost Impact
A 2025 case shared on a broker’s official community forum shows how auto square-off costs can snowball for a small trader. The client started with a modest negative balance of about ₹178.74. To recover this, the broker’s risk‑management system initiated a series of actions on pledged shares: first pledging, then auto square‑off, and finally un‑pledging. Each step carried its own fixed fee, such as pledge and unpledge charges and a separate auto square‑off fee, which together added up to roughly ₹200 in charges.
When the pledged share was eventually sold at around ₹284.75, brokerage and statutory levies alone were a little over ₹30. Even after applying sale proceeds of about ₹250 to the account, the client still ended up with a negative balance of more than ₹130. This example shows how auto square‑off related charges can turn a small debit into a much larger effective loss if positions and margins are not actively monitored.
Final Takeaway
Protect your trading profits by closing positions manually before the deadline. Relying on your broker often leads to extra fees and poor exit prices. The solution is simple: stay disciplined and exit well before the intraday square-off time. This small habit saves you from unnecessary penalties and keeps you in full control of your money.
FAQs
Ideally, exit intraday trades by around 3:00 PM, not at the last moment. This keeps you out of most brokers’ auto square-off window (roughly 3:10–3:25 PM) and lets you control your exit price instead of the RMS system.
No, square-off times vary slightly by broker and segment. Most brokers start auto square-off for equity intraday between 3:10 PM and 3:20 PM, and some close CO/OCO orders a bit earlier. Always check your specific broker’s RMS timings.
Yes. Close all intraday positions manually before your broker’s cut-off (preferably before 3:00 PM), or convert MIS to delivery if you have funds. Using stop-loss orders, time alarms, and avoiding illiquid circuit stocks also helps prevent chargeable auto square-offs.
Conversion after 3 PM is risky and often not allowed close to the cut-off. Most brokers expect MIS to CNC/NRML conversions to be done before their RMS window (typically before 3:10 PM). After that, positions are usually locked for auto square-off.
