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Let us take an example, you bought shares of Reliance on Tuesday, September 3, at Rs. X will get the sale proceeds equivalent to Rs. So if a brokerage has let you buy stocks for delivery with no money in your trading account, then the equity delivery trading meaning is obligated to pay for these purchases to the exchange. The broker would then recover the money from you and would also charge you an interest for the money that he has paid on your behalf to the exchange if you delay in payment. Well it can happen for various reasons.

Here are a few common ones:. If you sell any stock for Intraday you are expected to buy it back by the end of the day to close your position. Now assume you forgot to buy it! When you try to sell Reliance with the product code as CNC, the systems will check if you have these shares in your demat account and let you sell only if you do, thereby ensuring that there is no short delivery.

The role of the Exchange is to ensure that if you buy shares, equity delivery trading meaning get credit of the shares. Assuming you buy shares of Reliance from Mr. X and equity delivery trading meaning Mr. In the Auction session, the exchange invites offers from fresh sellers for quantities short delivered shares of Reliance in the above case.

It is a special market where only members of the exchange can participate as fresh sellers equity delivery trading meaning sell shares which are short delivered. The Auction market is conducted every day between 2: There is no fixed price for the Auction to happen. The exchange specifies a range within which the equity delivery trading meaning participants can offer to sell their shares. Upper cap of the range: Lower cap of the range: So in the Reliance example above, a fresh seller can offer to sell shares of Reliance in the Auction market in the range of assuming Reliance closed at Rs.

Coming back to the example, you bought shares of Reliance from Mr. X defaulted in giving you the shares. The exchange will now buy these shares in the Auction market and give it to you. Assume that in the Auction market the fresh seller is offering to sell shares at Rs. The Equity delivery trading meaning is obligated to buy it at equity delivery trading meaning price and give delivery of these shares to you.

The Exchange would hence buy these shares at Rs. X has defaulted he would have to pay the difference of Rs. Along with this, the Exchange also charges an additional penalty of 0. X failed to deliver. So, typically, in the books of accounts of Mr. X, he would have received a credit of Rs.

The broker then passes equity delivery trading meaning such auction charge to the defaulting client. Assuming that after Mr. X sold the stock at Rs. The difference of Rs. If, in the Auction, the stock gets bought at Rs. In such a case, the exchange settles it in cash on the basis of Close out Rate.

So in the above example, the exchange would close out the trade at Rs. X, the seller of the stock who defaulted, will have to bear the auction penalty of Rs. Love playing poker, basketball, and guitar. BTST and the other worry would be stock hitting upper circuit. For example you had short MCX for intraday, it then hit upper circuit, so you end up with short delivery. Sir with the above example I have a query.

After me buying shares of Reliance at Rs. You explained the fact that seller who defaulted will have to pay additional Rs. But what will happen with me as I am a buyer who has already paid Rs.

Will I only get Rs. If I happen to get only Rs. Also my broker would have charged me brokerage on the same. What happens with the Exchange charges and brokerage I have paid? Anything more than if the auctions happen at, usually goes the investor protection fund. But when i have got notification from zerodha by today equity delivery trading meaning may be i shall receive short deliver or funds against my purchase. X defaults while selling to me, so exchange will auction and make sure I get it any cost, right?

So when I btst how will I default? So how will I be penalised? You have to deliver the stock by Thursday equity delivery trading meaning latest to the exchange.

You get the stocks from auction only by thursday evening from the auction. Niru, I give you a cheque, without waiting for it to clear, you write another cheque to your friend.

Equity delivery trading meaning cheque bounces, what happens to the cheque you have issued? That bounces also right? So if you bought on MOnday and sold on Tuesday, assume the guy who sold defaulted. I bought suzlon on 9th October Delivery was short by shares. Till now 19thI neither got those shares nor the money.

I speak to your equity delivery trading meaning every day, and get the same response,i. But not credited on 14th, 15th, 16th and 17th. I purchased shares of eros on UC. Still waitingmy 5 lac rupees is stuck due to zerodha …and no one is helping! Are you confirming Short delivery will not happen with Zerodha? If so, It happen in my case in delivery mode itself. Now I got a short delivery notification saying it will be either delivered by 6th June or amount will be adjusted back but the share is moving up now.

Some one is asking me to prove the bugs I reported earlier in the older version of kite web on the newer version. This is a silly question which no customer can accept. I tried explaining him that how can replicate it after fix is deployed to production but no success.

Equity delivery trading meaning same person was saying Kite is beta version, then why such version is in live? Please sort that out first. Short delivery can happen with any brokerage firm, including Zerodha. Your purchase price will remain the same, if you were short delivered.

Checking on who spoke to you. Would I loose money on this trade? I am a zerodha client. Then the next day I was not able to sell the same equity delivery trading meaning. I sent the screenshot with error message to support team but no satisfactory reply yet.

I have incurred losses due to not able to sell. Please have someone look into this please. Hi Ashok, You had bought the shares on 29th.

Since they were short delivered, an email intimation was sent on 03rd and shares were credited to your account on 4th. We receive it from the Exchange on 4th mid-day and process credit to your account same day. They were showing in your holdings from 5th.

The representative told that this is as per rules. Lets say I bought 2 shares of a stock. Why is it shorting? Sir please help me. I to morrow rs payment through debit card ok.

But you my fund release very quickly. Hello My name is kedar kamat. I would like to know whether i can participate in bse nse auction through zerodha.

So the thing is all transaction from equity delivery trading meaning side were CNC. Not only I Iost the opportunity to book the profits on Friday but all my profits from earlier days were wiped clean.

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Delivery based trading is the most common form share trading done by most of the stock market investors throughout the world. In this type of trading the investors have to pay the full price of the stock and the stocks are deposited in their demat account. There is no predefined time limit in case of the delivery based trading for selling the stocks. Like all other forms of stock trading delivery based trading also comes with its pros cons.

The biggest advantage of delivery based trading is that you are not bound with time for selling the stock. You can hold the stocks for as long as you want. So, you can always hold a stock until you are getting a significant profit from the investment. Therefore, with delivery based trading you can always take your time to take a decision and reduce the risk of losses. When you are making a long term investment with delivery based trading, you can also benefit from other things like dividends, split of stocks, bonus shares and so on.

These are benefits that the companies offer to their share holders from time to time and you can make significant profit from these offers if you are holding the stocks for long periods. The biggest disadvantage of delivery based trading is the higher brokerage rate. The brokerage rate for delivery based trading is relatively higher than the margin trading. You have to pay the full price of the stock for deliver based trading, whereas, in case of margin trading you can buy stocks by paying only a part of the stock price.

So, in case of margin trading you can buy more stocks by investing less. In delivery based trading you can never benefit from short selling. That means you have to hold the shares before you actually sell them.

These are the benefits and disadvantages of delivery based trading. Whether you invest through delivery based trading or not solely depends on your financial capacity and willingness to take risks. Click here for Indian stock market tips. For more details click here.

Advantages of delivery based trading The biggest advantage of delivery based trading is that you are not bound with time for selling the stock.

Disadvantages of deliver based trading The biggest disadvantage of delivery based trading is the higher brokerage rate.