What is Equity Delivery

Intraday trading requires you to square off your position on the same day without physically delivering the securities. Equity delivery works the opposite way. So, what is equity delivery? Equity delivery meaning is getting physical delivery of shares in your Demat account. After you take delivery of the purchased shares, it is up to you whether you want to hold them in the Demat account or sell them. You are free to hold the stocks as long as you wish. Equity delivery trading is about long-term wealth creation. Moreover, margin is not available in equity trading. You must have the entire funds in your account to purchase the securities. However, some brokers provide the margin benefit in delivery trading through Margin Trade Financing.

Tips to Invest in Equity Delivery

1. Diversify - Diversification is a risk management technique used extensively by traders and investors. Ensure you conduct thorough research and select stocks ranging through diverse sectors. Any external factor impacting the share price from a specific sector can be offset by another set of shares from a different sector. A well-diversified portfolio, therefore, helps minimize the risk. You shouldn’t invest all your money in one share. Build a mix bag when you are buying shares. By investing in different companies, you’ll benefit in the long run.
2. Patience – It’s known fact that share markets are volatile by nature. It will test your patience regularly. Equity delivery allows you to hold shares in the Demat account for as long as you want. Do not panic when there are sudden price fluctuations in the market. Beginner traders may sometimes panic as they see a sharp decline in the prices of their securities, prompting them to sell their holdings. However, you must be patient and not make rash decisions. Have belief in your analysis and wait for the prices to bounce back. Holding the stock for a more extended period may be favourable.

Benefits of Equity Delivery

Delivery trading offers numerous benefits, as mentioned below:

1. Since you take the delivery of the shares, it is your decision when you want to sell them. You can look for ideal conditions for selling the shares for maximum profits and hold on to them until then. The tenure for which you want to have ownership of the purchased securities depends on you.
2. Various banks and financial institutions grant loans against securities. In times of a financial crunch, your shares come in handy as they can be pledged, and you can avail of a loan against them.
3. With shares in your Demat account, you receive the dividends that the company may distribute.
4. Investing your money in a fixed-income vehicle may fetch constant returns. However, investing in high-growth companies has the potential to make significant profits and can offer tangential returns on investment.
5. Taking delivery of shares qualifies you to receive bonus shares when announced by the company. When companies make substantial profits, they may issue 1:1 bonus shares, which implies you get an extra share for every share you own.

What are Equity Delivery Charges?

When you buy shares under equity delivery as an order type, the brokerage firm deducts a specific amount as a brokerage charge. Some brokers might provide discounted charges through varying subscription models.

Conclusion

Do thorough research and understand what is equity delivery, and what is equity delivery charges before making an investment decision. With delivery trading, you can hold the securities for the long term. Therefore, purchase the securities when they seem to trade at a relatively lower price and wait for the ideal time to sell them to make maximum profits. Look for free equity delivery brokers to save on charges.