What is Blocked Delivery Margin in Angel Broking
Blocked delivery margin is a margin requirement imposed by Angel Broking, a stock brokerage firm, when trading in certain securities. This margin is required to be maintained in the trading account as a percentage of the value of the blocked delivery shares.
Blocked delivery shares are shares that are not available for selling until the physical delivery of the shares is received. These shares are blocked in the account of the trader and cannot be sold until the physical delivery is completed.
Angel Broking requires traders to maintain a blocked delivery margin for such shares, which is a percentage of the value of the blocked shares. This margin is intended to cover the risk of price fluctuations during the period between the trade and the actual delivery of the shares. The blocked delivery margin can vary depending on the specific security being traded and the prevailing market conditions.
It's worth noting that not all brokers require blocked delivery margins, and the margin requirements can differ across different brokers. It's essential to carefully review the margin requirements and other policies of a broker before opening an account or trading with them.
Why delivery margin is blocked in angel broking.
Delivery margin is blocked in Angel Broking to ensure that the trader has sufficient funds in the trading account to cover the potential losses that may arise from the trade. The delivery margin is required to be maintained as a percentage of the value of the shares being traded.
When a trader buys shares in the delivery segment, the shares are blocked in the trading account until the physical delivery of the shares is received. This means that the shares cannot be sold until the physical delivery is completed. The blocked delivery margin is intended to cover the risk of price fluctuations during the period between the trade and the actual delivery of the shares.
The blocked delivery margin can vary depending on the specific security being traded and the prevailing market conditions. The margin requirement may increase or decrease depending on various factors such as the volatility of the stock, the liquidity of the market, and the overall risk associated with the trade.
By blocking the delivery margin, Angel Broking ensures that traders have enough funds in their account to meet the margin requirements and cover any potential losses. This helps to reduce the risk of a margin call and ensures that the trading account remains in good standing.
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