HOW TO SELL SHARES IN INDIA - DEMAT SELLING, SETTLEMENT & INTRADAY Vs.DELIVERY GUIDE

HOW THE RICH BUY INSURANCE : THE HIDDEN STRATEGIES THE 1% USE TO PROTECT, MULTIPLY & TRANSFER WEALTH

Introduction

Buying shares is exciting.
Selling shares is where money is actually made.

But beginners often wonder:

• How do I sell shares from Demat?

• Where does the share go after selling?

• When do I receive money?

• What is settlement cycle?

• What is square-off?

• Delivery vs intraday — what’s the difference?

This guide explains the complete selling process in India step by step.

How to Sell Shares from Demat Account

Selling shares means transferring ownership to another buyer through the stock exchange.

The process is simple and fully digital.

Step-by-Step: Selling Shares

Step 1: Login to Trading App

Open your broker platform.

Go to:

 Holdings / Portfolio

This shows shares stored in your Demat account.

Step 2: Select the Share

Choose the stock you want to sell.

Example:

TCS
Infosys
Reliance

You’ll see:

• quantity

• average price

• current price

Step 3: Click SELL

Order window opens.

You choose:

• quantity

• order type (market/limit)

• product type (CNC/MIS)

Step 4: Choose Quantity

You can sell:

• full quantity

• partial quantity

Example:

You own 10 shares
Sell 5 → 5 remain invested

Step 5: Choose Order Type

Market sell → instant execution
Limit sell → sell at chosen price

Step 6: Place Sell Order

Order goes to exchange.

If price matches → executed.

Step 7: Shares Debited from Demat

Once sold:

Shares move out of your Demat
Ownership transfers to buyer

What Happens After You Sell a Share?

This is called settlement process.

Selling does not mean instant bank money.

There is a sequence.

Trade Day Timeline (India)

Day you sell = T (Trade day)

Next working day = T+1

India now follows:

 T+1 settlement cycle

Settlement Cycle Explained (T+1)

Let’s say you sell shares on Monday.

Monday → Trade executed
Tuesday → Settlement completed

On Tuesday:

✔ shares transferred to buyer
✔ money credited to your trading account

When Does Money Reach Bank?

After settlement:

Money comes to trading account first.

You must withdraw to bank.

Transfer time:

Same day or next working day.

Complete Example

You sell:

10 Infosys shares
Price ₹1,500

Trade value = ₹15,000

Monday → sell
Tuesday → money in trading account
Withdraw → bank

Why Settlement Exists

Settlement ensures:

• ownership transfer

• payment confirmation

• clearing verification

• fraud prevention

Exchange acts as clearing authority.

What Is Square-Off in Trading?

Square-off means:

Closing an open position by doing the opposite trade.

Buy → square-off = sell
Sell → square-off = buy

Intraday Square-Off

Intraday trades must close same day.

If you buy intraday:

You must sell before market closes.

Otherwise broker auto square-off.

Example: Intraday Square-Off

9:30 AM → Buy 100 shares intraday
2:45 PM → Sell same shares

Position closed = squared off

What Happens If Not Squared Off?

If intraday position remains open:

Broker automatically closes near 3:15 PM.

This prevents overnight risk.

Delivery vs Intraday Selling

This is a key beginner concept.

Delivery Selling (CNC)

Delivery means:

Shares already in Demat.

You sell owned shares.

After selling:

Shares removed from Demat.

Money received after settlement.

Intraday Selling (MIS)

Intraday means:

You sell shares you don’t intend to hold overnight.

Two cases:

1️⃣ Buy then sell same day
2️⃣ Sell then buy same day (short sell)

No Demat holding involved overnight.

Key Difference: Delivery vs Intraday Selling

Feature	Delivery Sell	Intraday Sell
Shares owned?	Yes	Not required overnight
Hold overnight?	Yes possible	No
Settlement	T+1	Same day close
Purpose	Investing	Trading
Demat impact	Shares removed	None overnight

What Happens After Delivery Selling

Shares removed from Demat.

Buyer receives them T+1.

You receive money T+1.

What Happens After Intraday Selling

Position closed same day.

No Demat transfer overnight.

Profit/loss calculated instantly.

Short Selling (Intraday Concept)

Intraday allows selling first.

You sell shares you don’t own.

Later buy back cheaper.

Profit from price fall.

Example: Intraday Short Sell

10:00 AM → Sell at ₹500
2:00 PM → Buy at ₹480

Profit ₹20 per share.

This is intraday only.

Can You Short Sell in Delivery?

No.

You cannot sell delivery shares you don’t own.

Delivery selling requires Demat holding.

Charges When Selling Shares

Selling involves:

Brokerage
STT
Exchange charges
DP charges

DP applies only on delivery sell.

Common Beginner Selling Mistakes

 Selling wrong quantity
Selling CNC as MIS
Panic selling
Not checking settlement
Forgetting intraday square-off

Partial Selling Strategy

You don’t have to sell all shares.

Example:

Hold 20 shares
Sell 10 at profit
Keep 10 long-term

Common investor strategy.                           When Should You Sell Shares?

Investors sell when:

Target reached
Fundamentals change
Better opportunity
Portfolio rebalance

Traders sell based on price.

Key Selling Safety Tips

✔ Always check product type
✔ Confirm quantity
✔ Know settlement timing
✔ Square-off intraday before close
✔ Track funds after sale

           

Full Selling Flow Summary

You place sell order →
Exchange matches buyer →
Shares leave Demat →
Settlement T+1 →
Money credited →
Withdraw to bank

Beginner FAQ

Can I sell shares anytime?
Only during market hours.

Can I sell before buying?
Yes intraday only.

When do shares leave Demat?
On settlement day.

When do I get money?
T+1 trading account.

BEST TIME TO BUY SHARES IN A DAY

Key Takeaways

✔ Selling transfers ownership
✔ Money comes after T+1 settlement
✔ Intraday must square-off same day
✔ Delivery sells Demat shares
✔ Both have different purposes

Final Thoughts

Buying starts your investment.
Selling realizes your profit.

Understanding settlement and square-off removes confusion and prevents mistakes.

Every successful investor knows:

When to buy.
When to sell.
How selling works.