A short happens when you sell stocks but fail to deliver them to the exchange by the settlement day (T+1). This happens in the below scenarios:

• short position: If you take an intraday short position and if you sell a stock and its price hits the upper limit, you may not be able to buy it back, leading to a short delivery if you don’t own the .
• Transactions: Due to a shortage in the payout for the previous day’s buy trade, there would be a delivery pay-in shortage for the sell trade. For example, you buy the on Monday and sell it on Tuesday. Ideally, the securities pay-out for Monday’s buy trade will be marked for the pay-in of Tuesday’s sell trade. In case the share bought on Monday is not delivered by the exchange for pay-out, the sell transaction will be in a short delivery position.
• Physical delivery F&O: If you have an open futures position and in-the-money options on expiry, they’ll be settled physically. If you hold such a position (futures short, call option short, put option long) and do not have the underlying asset to deliver, this will create a short delivery position.

If you have open positions in futures or options at expiry but don’t own the underlying assets, it results in a short delivery.