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 by selling , and the stock hits its upper circuit (price limit), there may be no sellers available for you to buy it back. If you’re unable to square off your position by market close, it can result in a short delivery.
• 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 in futures or options at expiry but don’t own the underlying assets, it results in a short delivery.