A: There can be 3 scenarios, either it can be:

1.       Internal shortage

2.       Exchange shortage

3.       Combination of Internal and Exchange Shortage

Internal shortages are settled at the higher of the below 2 price(s):

Day’s High Price of T, T+1 and T+2 day

Closing Price of T+2 day + 1% of Closing Price of T+2 day

However Exchange shortages are settled by Exchange by way of attempting to purchase shares from auction market or by way of determination of Close out Price.