Square Off Meaning: Manual and Auto Square-Off

Square off means closing an open position by completing an opposite trade in the same instrument. Sell to close a purchase; buy back to close a short sale. A full square-off leaves no open quantity in that position. A partial square-off closes only some of it. Sending an exit order is not enough: the quantity must actually trade. Auto square-off is a broker’s risk process, with product-specific timings and charges.

What an opposite trade must match

For shares, check the stock, exchange and product shown in the broker’s position screen. For an option, match the underlying asset, the strike (contract’s exercise price), call or put type, and expiry. A call carries a buying right; a put carries a selling right. For a future, match the underlying asset and expiry. A similar-looking contract can create another position instead of closing the original.

Square-off describes the effect of a trade, rather than a special universal order type. An exit can use an available market, limit or conditional order, but each has execution limits. A GTT trigger activating does not establish that a position has closed.

Worked example: a partial exit leaves risk open

Illustrative share trade: suppose you buy 100 shares at ₹500. Later, 40 shares actually sell at ₹512. The closed part has gross profit of (₹512 − ₹500) × 40 = ₹480. You still hold 100 − 40 = 60 shares.

Assume those remaining 60 shares later sell at ₹495. Their gross result is (₹495 − ₹500) × 60 = −₹300. The completed trade’s total gross result is ₹480 − ₹300 = ₹180. These are fictional prices and quantities, with charges excluded.

An exit request for 100 shares that trades only 40 is also a partial close, even if you intended to exit everything. Check remaining open quantity and any pending order before submitting a replacement. Two active exit orders can create an unintended extra sale if both eventually trade.

Allocate opening charges across the closed quantities when reviewing partial exits, and include each exit’s own charges. Do not deduct the entire opening bill for every closed portion. For a separate cost estimate, see the F&O trading cost calculator.

Current Zerodha auto square-off timings

There is no single cut-off for every Indian broker. The table below reports Zerodha’s published schedule checked on 16 October 2026. CAS means Closing Auction Session, a process used to determine the closing price of eligible stocks. The broker’s support page says its risk team may adjust timings with market volatility.

Zerodha’s Closing Auction Session article dates these revised stock and F&O cut-offs from 3 August 2026. Older comments below that article retain earlier times, so the current support schedule is the clearer reference. Other brokers and products require their own policy check. Do not transfer this timetable to another account.

Auto square-off charge versus a statutory penalty

Zerodha’s timing guide lists ₹50 plus 18% GST for each auto-squared-off order. The tax matches the site’s verified GST rate. Arithmetic gives ₹50 × 18% = ₹9 GST, so that stated fee including GST is ₹59 per order.

Zerodha’s timing guide lists ₹50 plus 18% GST for each auto-squared-off order. Arithmetic gives ₹50 × 18% = ₹9 GST, so that stated fee including GST is ₹59 per order.

For illustration, two fee-bearing auto square-off orders at that published tariff give 2 × ₹59 = ₹118. That subtotal covers the named fee and its GST only. It is not the total cost of those trades. The trading charges guide explains the other categories.

What if the broker cannot close the position?

Zerodha’s policy says the client remains responsible for closing open positions and the broker is under no obligation to square them off. It also describes carrying an unclosed intraday position forward under the relevant delivery or overnight product if it was not closed. Read its full funding and risk terms for the consequences.

An illiquid market, a price restriction or a rejected order can leave exposure open. Auto square-off therefore cannot promise a particular fill, price or completed exit. Manual placement also gives no guaranteed price or execution. Compare actual order status with the position, rather than relying on the clock alone.

Closing an option versus letting it expire

A square-off trades the option before expiry. Exercise or expiry settlement follows the contract’s rules for any position still open. These are different events. Zerodha describes cash settlement for expiring index options; NSE describes options on individual securities as physically settled.

An open stock option that finishes in the money can therefore create share-delivery obligations. “In the money” means the option has exercise value at the settlement price. Do not infer those obligations from the premium you originally paid or received. Read the contract and the broker’s expiry policy.

This explanation does not need a fixed lot-size table. Use the quantity in the actual contract and trade confirmation when calculating a closed option’s money result. A premium change is not the same as movement in the underlying index.

What to keep in the trade record

• The exact stock or contract and product used.
• Opening quantity, each executed closing quantity and anything still open.
• Entry and actual exit prices, including separate prices for partial trades.
• Broker charges and whether a broker-initiated exit fee was billed.
• The planned exit, the reason for the actual exit and any execution problem.

OneTradeJournal lets you log the trade by hand and keep its plan, mistakes and notes. It cannot close an order. A squared-off trade can then be compared with its intended risk and reward, using actual results separately from planned prices.

Square off versus delivery

The word square off most often comes up with intraday products. Brokers give you extra leverage on an intraday product (MIS) because they expect the position to close the same day. If you hold the same shares as delivery, you pay the full amount and keep them. The product choice decides what happens at the cut-off.

The intraday vs delivery entry explains the difference, and the intraday leverage myths guide covers what the extra leverage does and does not do.

Worked example: an equity intraday trade and a missed cut-off

Illustrative numbers only. You buy 50 shares of a stock at ₹400 under an intraday product. You plan to exit before the broker's cut-off, but you are away from the screen. The broker's risk system places a square-off order at the market and your shares sell at ₹396.

• Gross result = (₹396 − ₹400) × 50 = −₹200.
• Auto square-off fee at ₹50 plus 18% GST = ₹59 (the fee is billed separately from other charges).
• Result before other charges = −₹200 − ₹59 = −₹259.

Now compare the other path. If the broker cannot or does not square off, for example because the stock is stuck at a price limit or an order is rejected, the position can carry forward as delivery. You would then need the full amount, 50 × ₹400 = ₹20,000, to be available. Check your own broker's terms for the exact treatment.

In both paths the lesson is the same: a clock-based exit is a safety net, not a plan. Write your own exit time in the journal and compare it with the broker's cut-off.

Auto square-off fees at several brokers

The table below is taken from this site's broker comparison page, which opened each broker's own pages on 13 October 2026. GST is 18%, so the total is the fee multiplied by 1.18. Fees change, so check the broker's page before relying on them.

Cut-off times differ by broker as well, and several moved earlier from 3 August 2026 when the closing auction session began for some stocks. Read the broker's current page rather than a timetable from another broker.

How squared-off trades are treated for tax

Closing a position does not by itself decide its tax category. As commonly described, intraday trades in shares are treated as speculative business income, while F&O trades are treated as non-speculative business income, and delivery trades held for a period are treated as capital gains. These labels and the right treatment for you depend on your facts, so confirm them with a chartered accountant. Our intraday trading taxation entry gives a plain summary.

For costs, the securities transaction tax (STT) on intraday equity is 0.025%, unchanged in the 2026 rate change, and is charged on the sell side. F&O STT rates rose from 1 April 2026. See the STT hike 2026 impact guide for the dated rates. Square-off fees are broker charges and are separate from STT.

Square off or expire: a decision to log

With an option close to expiry, you can close it before expiry, let it expire, or in some cases be exercised. Each has different charges and settlement. Log which one you chose and why, because many costly surprises happen in the last hour of expiry day. The STT entry explains why an in-the-money option can bring a tax charge at expiry even if you never sold it.

A journal checklist for exits

• Write your own exit time before the broker's cut-off.
• Note whether the exit was planned, forced or late.
• Record any auto square-off fee as its own cost.
• Check the position screen after every exit order, not only the order status.
• Write one line on what you would do differently.

Sources

• Zerodha / Intraday auto square-off timings, checked 16 October 2026.
• Zerodha / Responsibility for unclosed intraday positions, checked 16 October 2026.
• Zerodha / Closing Auction Session and revised intraday cut-offs, checked 16 October 2026.
• Zerodha / Options remaining open on expiry, checked 16 October 2026.
• NSE / Individual Securities F&O contract specifications, checked 16 October 2026.