Term

What is Delivery in Stock Market?

In the stock market, ‘Delivery’ means buying stocks and getting them deposited in your demat account. You become the owner of the stock, till you sell it.

To take ‘Delivery’ of shares, you need to have sufficient funds in your account. For example, a single share of Reliance Industries costs ₹ 1,546 (on December 30 2019).

If you want to buy 10 shares of Reliance Industries, you need to transfer ₹ 15,460 from your bank account to your trading account – to complete your purchase.

On the third day after the purchase date, you will get those 10 shares transferred to your Demat account. You are now, in your own small way, a part-owner of Reliance Industries. You can keep the shares in your demat account, until you decide to sell it.

This is how it works:

  • The day you make the purchase of shares is called the ‘Trading Day’.
  • On the second day, also called T1, the delivery of shares to your account is still pending.
  • On the third day, also called T2, the shares will be visible in your demat account.

In other words, if you buy shares on Monday, it’ll be credited to your demat account on Wednesday – provided there are no national holidays in between.

Since Saturday and Sunday are holidays for the stock market, if you buy shares on Friday, you’ll receive the ‘delivery’ of shares in your demat account on Tuesday. Friday is the trading day, Monday is T1 and Tuesday will be T2.

If you are a long term investor, chances are, you will not know of any other option except ‘Delivery’ based buying of shares.

In Zerodha, Delivery buying means you select the option ‘CNC’. This is how it looks:

In Zerodha, the buy screen will look like this. You select CNC which means Cash and Carry (Delivery based buying). You enter the quantity of shares you want to buy and then click on Buy.

Taking ‘Delivery’ of shares means you intend to keep it for a longer period of time, unlike Intraday where stocks are bought and sold on the same day.

If you have any doubts or questions on ‘Delivery’ of shares in the stock market, please post your questions in the comments section below.

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