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Fail to Deliver
Definition
A trade that does not settle on T+2 because the seller cannot deliver shares. Persistent fails can indicate naked short selling. The ASX publishes fail statistics and ASIC investigates suspected naked short cases.
Related Terms
T+2 Settlement
The ASX settles cash-equity trades two business days after execution. The buyer receives shares and the seller receives cash on T+2. Short sellers must deliver borrowed shares by T+2 to avoid a fail-to-deliver.
Naked Short Selling
Selling shares short without first borrowing them or securing a right to deliver them. Naked short selling of listed securities is prohibited in Australia under section 1020B of the Corporations Act 2001.
See short selling in action
Explore real-time ASIC short position data for ASX stocks.