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What is the Auction Process?
Before understanding what auction means, let’s understand what is pay-in & what is pay-out day?
Pay-in is the day when your broker collects the securities from your demat account and transfers them to the exchange and clearing member. This happens when you sell a security. On the other hand, pay-out is the day when the clearing member transfers the securities to the broker. The broker then transfers those securities to your demat account. This happens when you buy a security.
An auction process is a mechanism where an exchange auctions the investor’s stock holding when the person has sold the stock but is unable to deliver it within a stipulated time period. An auction can be a live, online, or sealed bid auction.
