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Buy In

Updated on March 1, 2023

When an investor has to repurchase the shares, as the seller did not deliver the shares or the entire lot on time is called Buy In.

Understanding Buy In

In India, the BSE and NSE follow the Trade +2 (T+2) settlement system, where the transactions are settled within two working days. In cases, where delivery is not completed or there is a partial delivery, these stock exchanges allow Buy In auction. The auction is on T+2 days and settlement happens on T+3 days. Dealers and brokers can participate and place bids and the traders who had defaulted on delivery earlier will have to pay the auction price plus brokerage fee to the successful auction trader. If the auction is unsuccessful, the purchasing trader will get a refund. The defaulter will pay least of these two:
a)Highest share price on trading day or
b)20% more than previous day’s closing price

Benefits of Buy In

Benefits of Buy In are:
1. Auction price is automated and transparent
2. The buyer gets the lowest price