How to Start Delivery Trading

How to Start Delivery Trading

How to Start Delivery Trading? Know what is delivery trading & delivery trading rules.

In delivery trading, investors buy stocks and hold them for a long time, usually for a few weeks, months, or years. In this trading, investors own the shares purchased and benefit from stock appreciation over time.

However, you might feel overwhelmed at first if you're new to delivery trading. But, once you know what delivery trading is and how to start delivery trading, you can make money from it.

In this article, you will learn what is delivery trading and a step-by-step guide on how to start delivery trading. You will also learn about opening demat accounts, factors while choosing DP for opening a demat account, and some of the most crucial rules to follow while starting with delivery trading.

Open Demat Account

Table of Content

  1. How to Start Delivery Trading? Know what is delivery trading & delivery trading rules.

What is Delivery Trading?

When you're looking for long-term investments, delivery trading is the way to go. In this trading, you buy a stock and hold it in a demat account.

After two days or even years, you can buy or sell the shares. However, the decision is up to you. It's not like intraday trading, where you have to sell the stock on the same day.

In delivery trading, you can sell the stock when you're sure you'll make the most money. Additionally, you'll need funds in your account before you can start trading delivery.

For example: Let's say you bought shares of ABC. You will receive the shares after T+2 days after completing your purchase transaction. When your demat account gets credited with shares, it's called delivery. Also, let’s assume you want to buy stocks worth Rs. 10,000 then you should have a cash limit of at least Rs.10,000 in your trading account.

How to start delivery trading?

You need a Demat & Trading Account to start delivery trading. You can open a Demat & Trading Account with a Depository Participant (DP). The Depository Participant can be any authorized bank, broker, or financial institution.

Also, consider some factors before choosing DP to open a demat and trading account, like brokerage fees, AMCs, account opening fees, ease of opening an account, the convenience of using it, whether the account is opened online or offline, and how long it takes.

After selecting a Depository Participant (DP), the normal procedure to open a Demat cum trading account is:

  • Visit the financial service provider's website or mobile app. ICICI Direct, HDFC Securities, Kotak, and blinkX provide free demat account opening services on their websites. By entering your basic information, you can open a demat account.
  • Once you fill out the form, you'll get a one-time password (OTP) on your mobile number.
  • Also, you'll get a link in your registered email. Enter the OTP you got in your registered email address.
  • Once you've verified the OTP, fill out the online account opening form.
  • Next, you'll get in touch with your Relationship Manager or you can do online eKYC.
  • Within 24 hours of the following process, you can open and use your demat account.

Delivery Trading Rules

You have to learn and stick to some rules even if you're good at delivery trading. If you're going to trade, make a checklist beforehand so you're prepared for all the points and conditions. Here are the following points:

  • Don't jump into delivery trading without doing your research.
  • To trade delivery, you need enough money in your account. If you don't have all the money in your account, you can't buy or sell stocks.
  • To make sure you don't lose money, always sell your shares at the right time.
  • Set your stop losses and target price before you trade.
  • Investing in different companies is always a good idea. You will have more chances of benefitting from multiple companies.

Conclusion

If you do your research and develop a strategy, delivery trading can prove to be a profitable way to invest your money. To start delivery trading, you will need to open a demat and trading account with a Depository Participant. Also, before selecting a DP, consider various factors, such as brokerage fees, AMCs, account opening fees, ease of setting up an account, and convenience of using it.

You need to follow a few crucial rules once you open a Demat account before beginning delivery trading. Researching thoroughly, having enough funds in your account, selling shares at the correct time, setting stop losses, and investing in a variety of stocks are some delivery trading rules you should follow.

How to Start Delivery Trading FAQs

Start with a demat account and add some funds in your account to start delivery trading.

Yes. Delivery trading is one of the most profitable options in the trading market. With it, the trader becomes the sole shareholder and receives all benefits offered by the company.

The benefit of delivery trading is that it's less volatile than intraday trading or even trading futures and options. Also, a low-volatility portfolio reduces risk and increases returns.

Trading intraday is risky, but it can give you a chance to make big money. Conversely, delivery is less risky and allows you to build wealth over the long term.

You can hold delivery shares for one day or weeks or even months as per your convenience.