delivery margin in zerodha

Wiki Article

When you buy shares in the stock market, you can either trade intraday or take delivery. Delivery trading refers to buying shares and holding them in your Demat account beyond the same trading day. Zerodha, like all brokers, follows SEBI’s peak margin rules and applies what is known as delivery margin. Understanding delivery margin in Zerodha is essential for investors who prefer long-term or positional trading.

What Is Delivery Margin in Zerodha?

Delivery margin in Zerodha is the total amount of money you must have in your trading account to buy shares for delivery under the CNC (Cash & Carry) product type.
In simple terms, if you want to buy stocks and hold them overnight, you need to pay 100% of the trade value upfront.

Unlike intraday trading (MIS), where you get leverage, delivery trading does not offer any leverage. Zerodha requires full funds before allowing a delivery buy order.

Example:

If you want to buy shares worth ₹40,000 for delivery, you must have the full ₹40,000 in your account. Zerodha will not allow you to use borrowed money or excess leverage for delivery trades.

Why Is Full Delivery Margin Required?

Before SEBI’s peak margin framework, some brokers gave 2x–4x leverage on delivery trades. But this increased risk for both traders and brokers.

SEBI now mandates that all delivery trades must be funded with 100% upfront margin. Zerodha strictly follows this rule to:

• Protect traders from excessive leverage

• Maintain safe market practices

• Prevent margin shortfalls

• Reduce price manipulation risks

This ensures transparency and stability in the market.

Delivery Margin for Selling Shares

If you are selling shares from your Demat account, and they are already settled, then:

• No margin is required

• You can sell them freely as CNC

However, in special cases like BTST (Buy Today, Sell Tomorrow), the exchange may require a small margin due to auction risks.

How Delivery Margin Works Across Segments

1. Equity Delivery (CNC)

• Requires 100% margin

• No leverage offered

• Shares are added to your Demat account after T+1/T+2 settlement

2. F&O Delivery Margin (Futures & Options Carrying Overnight)

For carrying futures or short options overnight, Zerodha requires the full SPAN + Exposure margin. This is different from equity delivery but still falls under “delivery margin” because the position is held beyond intraday.

How to Check Delivery Margin in Zerodha

Zerodha provides easy ways for traders to view required margins:

1. Kite Order Window → displays margin required before placing an order

2. Zerodha Margin Calculator → most accurate tool for all segments

3. Funds → Used Margin → shows how much margin is currently blocked

These tools help avoid order rejections or margin penalties.

Key Points to Remember

• Delivery margin = full payment required for CNC trades

• Zerodha does not provide leverage for delivery

• SEBI peak margin rules ensure all brokers collect full funds upfront

• Selling existing shares requires no margin

• BTST may involve small risk-based margin

Conclusion

Delivery margin in Zerodha ensures safe and responsible trading by requiring investors to pay the complete value of their delivery trades. By understanding how delivery margin works and checking it before placing orders, traders can avoid surprises and manage their capital smarter. For long-term investors, delivery trading remains the safest and most transparent way to invest in the stock market.