Equity delivery Definition

One way to trade the share market is through equity delivery, or delivery-based trading. An equity delivery is when you purchase shares and keep them in your demat account for a period of time. Delivery trading allows you to hold shares for as long or as you wish, once they are delivered to your home. You own the stock you purchase and can sell it at a profit when the time is right. This contrasts with intraday trading which allows you to buy and sell shares in one day. Intraday trading does not require you to pay full price. You will need sufficient funds to purchase shares in delivery. There are no margins.

How to invest in Equity Delivery

We have now looked at what equity delivery is. Let us now look at investment tips that will maximize your profits.

Mix and match - Shares are best when you don't put all of your eggs in one basket. Don't invest all of your money in one stock. When buying shares, aim to build a mix bag. Do your research, then look for companies in a variety sectors. You should make a list of promising areas and then find companies that trade in those areas. You will reap the benefits of investing in multiple companies if there is positive news.

Keep your cool. The share market is extremely volatile. The price of the shares you purchase could go down. All shares have their prices fluctuate. Do not be alarmed if the price of your shares drops. Delivery-based trading has a significant advantage over intraday trading in that you don't have to sell your shares for a set period. If you are calm, this increases your chances to make a profit. Most traders wait for the shares to reach their cost price before selling.

Equity Delivery

There are many benefits to delivery-based trading.

• There is no time investment so you can keep the shares even if the market is not good and then sell them when you are happy with the price.
• Your shares may be used to get loans from banks or finance companies. Your shares can be a great help in times of need.
• You can declare a dividend per share if you notice that a company makes profit. These shares will earn you dividends for each one.
• You can get a maximum of 10% or 9% yearly interest if you have your money in a bank. If you invest your money in shares of growing companies, you could get returns as low as 15%. You can even get returns of up to 30% to 40% per year from some shares. Trading long-term is the best way to make share market gains.
• Bonus shares may be offered to companies that make a significant profit. You might be eligible for a share of the company's profits if they declare 1:1.

Conclusion

Always do your research on the shares of companies you plan to purchase. Buy shares at a discount to their fair value. You will have a better chance of making profit. This skill is useful for intraday traders as well as delivery traders.

Perhaps you are wondering about equity delivery fees. You may be wondering what are equity delivery charges?