Friends, In today\’s article we will discuss about What Is Delivery Margin In Zerodha? Do you trade in the stock market? Do you make money trading stocks? If your answer is yes then you must know that some money is held in delivery margin while selling any stock.
When you sell shares, 20 percent of the money is held in the delivery margin. You get 80% of the amount in your account immediately, while the remaining 20% of the amount is credited on the next day.
What Is Delivery Margin In Zerodha?
When we sell shares, you cannot get 20% amount on the same day. That amount is held as delivery margin and you get it back in your account the next day.
Zerodha and all other brokers are also holding 20% amount as delivery margin as it is regulated by SEBI.
We will try to understand with an example.
Suppose you sell a share worth rupees 50,000.
Then you will get rupees 40,000 instantly in your Zerodha account and through which you can start trading.
Now remaining 20% i.e. 10,000 rupees you will get on next trading day.
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How Does Delivery Margin Work?
Delivery margin in Zerodha refers to the amount of funds traders must maintain in their account to hold open positions beyond the intraday trading session. Unlike intraday margins which allow higher leverage for short-term trades, delivery margins are higher because they cover the risk of holding positions overnight or longer.
The calculation of delivery margin considers factors like the volatility of the stock, market conditions, and regulatory requirements. It ensures that traders have sufficient funds to cover potential losses that could occur if the market moves against their positions over a longer period.
Also Read: Long Term vs Short Term Investments
How to Check Delivery Margin In Zerodha Kite?
- Login to Zerodh Kite app
- Go to the \”Funds\” page
- You will see options like Available Margin, Used Margin, etc., with Delivery Margin option below. You will be able to see your held amount.
How to Effectively Manage Delivery Margins?
Effectively managing delivery margin is important for traders to maintain their positions without facing unnecessary risks or margin calls. Here are some tips to help you manage delivery margins effectively.
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- Plan Your Trades
- Monitor Account Balance
- Diversify Your Portfolio
- Understand Margin Calls
- Review Margin Levels Regularly
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- What is PE and PB Ratio?
- IOC Share Price Target
- Is Upstox Application Good for Option Trading in India?
- Is Groww App Better or Upstox for Investing as a Student?
Conclusion
In conclusion, understanding delivery margin in Zerodha is essential for traders seeking to extend their positions beyond the intraday timeframe. This margin not only ensures adherence to regulatory requirements set by SEBI but also acts as a protective measure against market volatility.
With 80% of the sale proceeds available immediately and the remaining 20% credited the next day, delivery margin management becomes integral to maintaining financial stability and minimizing risks associated with holding overnight positions.
FAQs
Will I get delivery margin money back?
When you sell the stock, you get 80% immediately while 20% is held as delivery margin and you get it on the next day.
What is delivery margin in kite?
Delivery margin refers to the amount of margin blocked when selling securities. In addition to covering regular securities transactions.
What is negative delivery margin in Zerodha?
When the delivery margin is in the negative, it indicates that the sale you made was in profit.
