What is Delivery Trading?

Delivery trading is a type of trading where you can buy shares today and sell them whenever you want after the shares are delivered. There is no time limit to sell the shares as it is in Intraday trading where you have to sell your shares the same day. In delivery trading, if you want, you can sell the shares that you bought today, even after 2 days, a year, or even after five years. Find out about different types of trading and choose what suits you best.

 

 

How much time does it take for a share transfer in Demat Account?

Transfer of shares to your demat account may take T+1 days I.e., two trading or transaction days, which means if you buy shares today, then today it is T Day, tomorrow T+1. So, T+1 means shares will be delivered to your demat account day after you bought. how to open a demat account.

 

 

Features of Delivery Trading

The prominent feature of delivery trading is that the shares get delivered to your demat account and after that, it depends on you for how long you want to hold onto those shares and when you want to sell them.

 

Another feature of delivery trading is the presence of sufficient cash and shares before the purchase and sale of shares.

 

For example- if you wish to buy shares worth Rs.1,000 you need to have atleast Rs.1,000 in your demat account and if you want to sell 100 shares, then likewise you need to have 100 shares in your demat account.  

 

 

Advantages of Delivery trading

 

1). No-time constraint to hold stock: In delivery trading there is no time limit to sell stocks and you can hold them for as long as you want.

 

2). Get long term stockholding benefits: Delivery trading allows you to hold the shares for as long as possible and when you do that you reap the benefits of holding a share for long term such as en-cashing your dividend payments and getting bonus shares.

 

3). Risk of short selling is nullified: In delivery, you cannot do short selling of shares since to do that you need to have shares present in your demat account, hence in delivery trading, you negate all the risks associated with short selling.  

 

 

Disadvantages of Delivery trading

 

1). High Brokerage charges: Since you can hold onto the shares for a longer period, the brokerage charges associated with delivery trading are on the higher side in comparison to Intraday trading.

 

2). Increased Securities Transaction Charges (STT) and other charges: In delivery trading, Securities Transaction Charges (STT) and other charges associated with it are on the higher side in comparison to Intraday trading.

 

3). Payment in advance: As in delivery trading you need to maintain the minimum requirement for a transaction, and you cannot avail yourself of margin trading as you do in Intraday trading.  

 

 

Conclusion

In contrast to intraday trading, delivery trading gives you the opportunity to hold and sell shares whenever you wish and at the same time counteract short-term volatility by holding the shares for a long term.