InvestorQ : What exactly is meant by the Close-Out facility in the stock exchange?
Niraj Mehta made post

What exactly is meant by the Close-Out facility in the stock exchange?

Answer
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Neelam Naik answered.
2 years ago


An online facility to close–out open positions of members in the capital market segment whose trading facility is withdrawn for any reason, has been provided with effect from June 13, 2007, and is known in market parlance as “Close-Out Facility”.
If a trader terminal has been disabled, the trading members will be allowed to place close-out orders through this facility. Only orders which result in a reduction of existing open positions at the client level would be accepted through the close-out facility in the normal market. Members would not be allowed to create any fresh position (long or short) when in the close-out mode, to place close out orders with custodial participant code and to close out open positions of securities in trade for trade segment.