When selling securities from your Zerodha demat account, a portion of the proceeds is blocked as a delivery margin This article explains the concept of delivery margin and how it functions on Zerodha Kite
What is Delivery Margin?
Delivery margin is a 20% margin requirement imposed by the Securities and Exchange Board of India (SEBI) on all equity delivery trades. This margin serves as a safeguard against potential settlement risks and ensures that sellers fulfill their delivery obligations.
How Delivery Margin Works on Zerodha Kite:
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Selling Securities: When you sell shares on Zerodha Kite, 20% of the sale proceeds are automatically blocked as delivery margin.
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Credit Availability: The remaining 80% of the sale proceeds are credited to your account as a negative balance under the “Used Margin” field. This negative balance can be utilized for other trades.
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Delivery Margin Release: The delivery margin is released and made available for use from the next trading day onwards.
Example Scenario:
Let’s assume you sell 50 shares of ZEEL at ₹211.15 per share. The total sale value is ₹10,557.50.
- Delivery Margin: 20% of ₹10,557.50 = ₹2,111.50
- Available Credit: 80% of ₹10,557.50 = ₹8,446 (negative balance under “Used Margin”)
Additional Points to Note:
- The delivery margin also includes an additional margin block if you have F&O positions due for physical delivery.
- Zerodha does not provide any leverage or margins for equity delivery/carry-over positions.
- You must have sufficient funds in your trading account to take delivery of shares. Failure to do so may result in Zerodha cutting your position.
Related Articles:
- What is a margin penalty, and why is it charged?
- What are margins and how can margin shortfall occur?
- What is Value at Risk (VAR), Extreme Loss Margin (ELM), and Adhoc margins?
- What are the different types of margins charged by the exchange?
- What is a daily margin statement, and how to understand it?
Keywords:
- Zerodha Kite
- delivery margin
- SEBI
- equity delivery trades
- margin requirement
- settlement risks
- available credit
- used margin
- F&O positions
- physical delivery
- margin penalty
- margin shortfall
- Value at Risk (VAR)
- Extreme Loss Margin (ELM)
- Adhoc margins
- daily margin statement
The delivery margin, which is blocked when selling securities from a distressed account and amounts to 2020% of the value of the stocks sold, In accordance with SEBI’s new peak margin standards, only 80% of the credit from selling holdings will be available for new trades. The following trading day will see the release and availability of the funds blocked under this category. See Why isn’t full credit being received against the holdings’ sell value for more information.
Zerodha provides up to 5 times (20% margin) leverage for intraday using Margin intraday square off (MIS) and Cover Order (CO) for equity. With ₹1 lakh, stocks can be bought or sold for intraday up to ₹5 lakhs. Based on Zerodha’s policy, the list of stocks (DOC) and the leverage provided change. Due to peak margin rules by SEBI, there is no leverage offered for equity F&O, currency, and commodities segments.
Did you know? Peak margin regulation was introduced in 2020 to ensure that brokers don’t take large risks by providing higher margins or leverage to the customer. Today all the brokerage firms in India can offer the same maximum intraday leverage. To learn more about peak margin circulars, visit tradingqna.com/t/peak-margin-requirements-from-dec-1st-2020-its-effects.
Zerodha Kite Delivery Margin Kya Hota Hai | Delivery Margin In Zerodha, Delivery Margin Share Market
FAQ
What is the delivery margin of Zerodha?
Is margin available for delivery?
How can I get leverage in Zerodha for delivery?
Does Zerodha provide margins?
Zerodha provides margins on holdings of stocks, ETFs, and mutual funds. This procedure is referred to as pledging. The margin obtained can be utilized for intraday equity trading, long and short futures, and writing options (equity and currency F&O). Commodity futures and options cannot be traded using collateral margins.
Does Zerodha provide leverage or margins for equity delivery/carry-over positions?
No, Zerodha currently does not provide any leverage or margins for equity delivery/carry-over positions, i.e. orders placed through CNC product type. To learn more about product types, see What does CNC, MIS and NRML mean?
How much leverage does Zerodha offer?
With ₹1 lakh, stocks can be bought or sold for intraday up to ₹5 lakhs. Based on Zerodha’s policy, the list of stocks (DOC) and the leverage provided change. Due to peak margin rules by SEBI, there is no leverage offered for equity F&O, currency, and commodities segments.
What is delivery margin in Zerodha?
In Zerodha, delivery margin refers to the margin required for taking delivery of shares purchased in the cash market segment. It is the amount of funds required to be maintained in the trading account as collateral to cover the value of the shares purchased for delivery.