What is Delivery Trading?

Deliveries in the stock market are different from intraday trading in that they allow you to hold stocks for a longer period of time. Delivery trading has the biggest advantage over intraday trading since you can square off your position at any time, unlike intraday trading.

A delivery transaction differs from intraday trading in that ownership passes to the buyer of the shares, unlike intraday trading. Brokerage fees are charged by the depository participants, which also include depositories' costs after the shares are transferred to the buyer's Demat account.

You also need to know the difference between intraday vs delivery. Check out our article.

Advantages

• Flexibility

When you trade delivery, you are not bound to sell your shares within a set period of time; you can sell them whenever you feel it is necessary. Holding on to your stocks and selling them when you decide it's time is a viable option if you anticipate the price of your holding to rise.

• No risk of short selling

Short selling can lead to a loss of money for a trader, but delivery trading eliminates this risk. Short selling involves selling shares that a trader does not own in the hopes that the share price will fall in the short term so that the trader can buy the share for a lower price at the end of the day, thereby profiting from the price drop.

Disadvantages

• No Margin facility

It is not possible for delivery traders to trade on margin, in contrast to intraday traders, so they can only buy stocks worth their capital, whereas intraday traders can get a loan from brokers to buy stocks worth more than their capital, which is known as margin trading.

• Transfer of shares

The shares must be received in the delivery trader's Demat account by the T+1 settlement cycle in order to place a sell order since delivery trades also involve ownership transfer.

Intraday traders, on the other hand, can sell their shares directly if the price fluctuates in the short term.

If you also want to know what is btst trading? You can read our article for more information.

• Patience is required

It may take delivery traders some time to earn profits since they hold shares for a longer period and can take advantage of the company's growth, unlike intraday traders, who can earn good profits quickly.

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