What is Delivery?
Delivery refers to the process of transferring ownership of securities from a seller to a buyer after a trade has been executed. When investors engage in delivery-based trading, they purchase securities with the intention of holding them for an extended period, typically beyond the settlement date. Once the trade is executed, the seller delivers the actual securities to the buyer, and ownership is legally transferred.
Key Features Of Delivery:
- Transfer of Ownership: Delivery involves the legal transfer of ownership of securities from the seller to the buyer, ensuring that the buyer gains full rights and entitlements associated with the ownership of the securities, including voting rights and dividends.
- Settlement Process: Delivery-based trades undergo a settlement process where the actual securities are physically transferred from the seller’s demat account to the buyer’s demat account. This settlement process typically occurs on the settlement date specified by the stock exchange.
- Long-Term Investment: Delivery-based trading is associated with investors who buy securities with the intention of holding them for an extended period, often for months or years. Unlike speculative or short-term trading strategies, delivery-based trading focuses on long-term capital appreciation and investment growth.
Difference between Delivery and Intraday
In the stock market, it’s important to know the difference between two types of trading, delivery and intraday. Delivery means buying and keeping stocks for a while, while intraday means buying and selling on the same day. The big differences are how long you keep the stocks, the risks involved, and whether you’re using borrowed money.
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