What does the 'delivery margin' field on Zerodha Kite mean?
As per regulations, effective from October 7, 2024, 100% of the proceeds from selling holdings will be credited to the trading account and made available on the same day for all trades, including stocks and F&O positions.
Previously, only 80% of proceeds were available for further trades on the same day, with the remaining 20% available the next day. For example, selling shares worth ₹1,00,000 would provide ₹80,000 to be used on the same day and the remaining ₹20,000 the following day. Now, the entire ₹1,00,000 can be used to place trades on the same day.
When selling securities from a demat account, the delivery margin, which amounts to 20% of the value of the stocks sold, is blocked. As per SEBI's new peak margin norms, only 80% of the credit from selling holdings will be available for new trades. The funds blocked under this category will be released and made available from the next trading day. To learn more, see Why is full credit not being received against the sell value of the holdings?
Example Scenario
Let's assume that 50 shares of ZEEL have been sold at ₹211.15 each. The total value of the holdings sold is ₹10,557.50, calculated by multiplying 50 shares by the price per share of ₹211.15 (excluding charges).
Out of the ₹10,557.50, 80% credit (₹8,446) is available as a negative balance under the used margin field. This negative used margin can be utilized for other trades. The remaining 20% credit (₹2,111.50) is blocked under the delivery margin field, as displayed below:
The delivery margin also includes an additional margin blocked if the F&O positions are due for physical delivery. To learn more, see Why is higher than usual margin blocked for my F&O trades close to expiry?
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