In equity delivery trading, you purchase some shares and keep them in your Demat account for a while. Here, once the shares have been delivered to oneself, they are free to be kept for whatever length one likes . The stocks purchased are all yours to hold onto until it’s the right time to sell them for a healthy profit. At the same time, intraday trading involves buying and selling shares during the same trading day. In intraday trading, you do not need to pay the full cost of the stocks . However, as there are no margins available when buying shares in delivery, you must have sufficient money on your account.
How do Equity Delivery Charges work?
Through an online share market app, you can purchase stocks or shares. As a result, you might notice that a charge is taken out when you trade; this is how they get paid. The brokerages deduct a commission when you purchase stocks through them, and you get the equity delivery in a Demat account after the settlement period. However, there are a few digital apps that don’t charge customers for such transactions if they are registered users of that organisation .
The process of buying Delivery Shares
You must first sign into your trading account online in order to buy an equity delivery of a few shares of a particular company. You must know/ have login credentials for your trading platform. Then, find the share you want to buy after logging in. The stock’s entire information will be shown. You can pick the pricing and order type that you desire. As soon as the transaction is complete, the shares will be delivered electronically to your Demat account. It takes three days to deliver.
Equity Delivery’s Advantages
Several advantages of delivery trading include:
- You can hold onto the shares throughout a down market and only sell them when the price is right because there is no waiting period.
- Some banks and financial institutions base their loans on your shares. Therefore, your shares come in handy while you are going through a challenging time.
- You may declare a dividend per share if you observe that a company is profitable. Then, if you own shares in these companies, each share will earn you dividends.
- A bank will only give you an annual interest rate of 9% to 10% if you keep your money there. However, if you invest that money in buying shares, you could see profits starting at 15% or more. Some may offer you returns of up to 30 to 40% per year. The best stock market returns come from long-term trading.
- A corporation may announce bonus shares if it achieves a significant profit. If they announce a 1:1, you might receive a share for free along with the shares you already own.
Advice for Equity Delivery Trading
After examining stock delivery, let’s examine several investment strategies that will increase your returns.
- When purchasing shares, always try to create a varied portfolio.
- After doing your homework, choose a few businesses from various industries. Choose organisations that do business in the areas you have identified as promising.
- You will gain from diversifying your investments since you will profit if any of those industries receive good news.
- Since the stock market is unpredictable, it will frequently put your patience to the test. There is always a chance that the shares you purchase will decrease in value. Every share’s price fluctuates frequently.
- Do not panic and sell your shares if you notice the price sliding downward. The fact that you are not required to sell your shares within a set time frame makes delivery trading far more advantageous than intraday trading. If you remain calm, your chances of profiting increase . The majority of traders hold off on selling until the stocks reach their cost price.
- Always conduct your homework on the businesses whose shares you intend to purchase.
- Attempt to purchase the shares while they are trading below their fair value. By doing this, you will improve your chances of success. Both intraday and delivery traders might benefit from knowing when to buy and when to sell.
Use the broker calculator.
When investors participate in delivery trades, traditional brokers charge a higher fee, up to 0.6%. However, a few brokers charge the lowest delivery brokerage, which is only Rs. 20 per order or 0.2%, whichever is less , as India’s top discount broker. On the brokerage calculator, you can analyse and calculate intraday brokerage vs delivery brokerage charges.