How much margin is required to convert positions from intraday to delivery?

Switching from an intraday trade to a delivery trade means you’re moving from a short-term, same-day transaction to a longer-term holding. This shift necessitates a change in the financial commitment required. Essentially, you’ll need to bridge the gap between the reduced margin used for intraday trading and the full margin needed for delivery.

If you want to keep shares in your Demat account, you’ll need to provide the full amount required for a delivery trade.

Because intraday trading uses less of your own money (thanks to higher leverage from brokers), you only paid a portion of the total cost. When you switch to delivery, you’re essentially buying the shares outright, so you’ll need to add the difference to cover the remaining cost.

Here’s a simplified explanation:

To transition your position from intraday to delivery, you must fulfill the complete margin requirement associated with delivery trades. In essence, you must cover the difference between the margin already paid for the intraday trade and the total margin required for holding the stock.

The calculation is straightforward: 

Additional Margin Needed = Total Delivery Margin – Initial Intraday Margin.

For instance, if you purchased shares during an intraday session using a smaller margin, and now wish to retain those shares in your Demat account, you’ll need to deposit the remaining funds necessary to meet the 100% margin requirement for delivery.

Essentially, you are paying the remaining amount to fully own the shares.

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