What is Delivery Trading? What are the things to keep in mind while trading delivery? What are the advantages and disadvantages of delivery trading?
Nowadays many people are also earning a lot of money by investing in the stock market. But some people also lose all their money by investing in share market, so whenever you think of investing in share market, first of all you should know how to invest in share market or how to buy shares, What are the types of trading? In this article, you will be told about delivery trading, which is a way to invest in the stock market, so let’s see what is delivery trading? What are the things to keep in mind while trading delivery? What are the advantages and disadvantages of delivery trading?
What is Delivery Trading?
Delivery trading is a way of investing in the stock market, you can also call delivery trading as investment. That is, it is your long-term investment in a type of stock market. Delivery trading means that when you buy shares of a company, you hold it for a long time. That time could be a month, 1 year, 10 years, 20 years.
In this type of trading, when you buy a share, that share gets transferred to your demat account. And your shares are safe in the demat account, you can sell your shares whenever you want by withdrawing them from the demat account. Whenever you feel it is appropriate that I will profit from selling this share now, then you can sell that share, thus delivery trading means buying a share and holding it for a long time.
Thus, in delivery trading, you buy the shares of a company, hold it and sell it at the appropriate time.
If you want to know how to learn share market then this post of ours will be helpful for you.
What are the things to keep in mind while trading delivery?
- While doing delivery trading, the first thing we should keep in mind is that we should not buy our shares of any one company because it may happen that if we do not get profit from that company, then we should buy shares of different company. If there is no profit from one company, it may be from the other, thus one should never buy shares of one company. Divide your shares by buying shares of different companies, you are more likely to get profit.
- The second most important thing to keep in mind is to be patient and hold your stock for a long time. If a company is doing well, then it will do well in future, hold your shares with this positive thinking. You are likely to get more profit from this. The main purpose of doing delivery trading is that you keep your shares with you for a long time.
- The third most important thing is that when you buy shares of a company, what is the price of that share at the time of buying? So you buy shares of a company when its price is too low, and sell the shares of that company when its price is too high. If you buy the stock at a cheaper price and sell it at a much higher price, then your profit is also very high.
- Whenever you buy shares of a company, fundamental analysis about that company means that what has been the performance of that company over the years? And what will happen next? With better strategy you should buy shares and with the same strategy you should sell shares. If you buy or sell shares without any strategy, then it becomes like a gamble.
You should make a strategy and then buy and sell the shares, this will make your profit more.
What are the benefits of delivery trading?
- The first advantage of delivery trading is that you can hold your shares for a long time. You do not need to sell the shares immediately after buying them. In this, you can keep your shares for 1 year, 2 years, 10 years for as long as you think is appropriate.
- Delivery trading is much preferred by new investors. Because in this you do not need to have much experience of stock market / stock market. Even if you are a new investor in the share market / stock market, you can start your trading with delivery trading. You have bought a share and it is safe in your demat account. You don’t need a lot of experience to sell it when the time is right. And it is not a very difficult task. Even a completely new investor can do this.
- Delivery trading is much safer than other trading because when you buy shares of a company, it gets transferred to your demat account. And until you withdraw it from your demat account, it remains safe there. So in delivery trading the safety is higher and the probability of loss is less as compared to other trading.
What are the disadvantages of delivery trading?
- Depository participant charge is levied in delivery trading which reduces the profit of investors Depository participant charge means that the depositories in which we have demat account and in those demat account is secured by us, then for the security of those set by us by the depository. Some fee is charged which is called Depository Participant Charge.
- There are two depositories in India (1) Central Depository Service Limited (CDSL) (2) National Securities Depository Limited (NSDL), ₹ 5.50 paise is charged by CDSL. Depository charge is charged, NSDL charges ₹ 4.50 paise Is.
- In addition to the Depository Participant charge, through the brokerage we keep our city safe in the demat account, we are also charged for the same by those brokerages which also reduces our profits. As brokerage charges ₹8 are charged by ZERODHA and with this we also have to pay 18% GST. The brokerage fee charged by Upstox is ₹ 13 and we have to pay 18% GST along with it.
So thus we see that the biggest disadvantage of delivery trading is that it charges a fee to secure our shares in a demat account. So whatever profit we get from this, we have to see the fee after deducting it, then our profit is less.
Conclusion – What is Delivery Trading?
Hope this post was helpful for you. And hope you do delivery trading now? What are the things to keep in mind while trading delivery? What are the advantages and disadvantages of delivery trading? Would have known We appreciate your suggestions and contributions. Do let us know by commenting in the comment box below to give your suggestions. thank you!
What are the types of trading?
There are four types of trading such as – scalping trading, intraday trading, swing trading, positional trading.
What is the difference between delivery and intraday?
In intraday trading, shares are bought and sold on the same day, whereas in delivery trading the shares are held for a longer period of time.