CNC in Zerodha stands for “Cash and Carry.” It is a type of order placed by traders and investors in the stock market. CNC orders are used for buying stocks and holding them for an extended period, rather than trading them frequently.
In the world of investing, there are two primary types of orders: intraday orders and delivery orders. Intraday orders are those where you buy and sell a stock within the same trading day, while delivery orders involve buying a stock and holding it in your demat account beyond the trading day.
Zerodha, one of India’s largest retail stockbrokers, provides the CNC facility to its clients. CNC orders allow investors to purchase stocks and hold them for an extended duration, ranging from a few days to several years. This is different from intraday trading, where stocks are bought and sold within the same trading session.
When you place a CNC order in Zerodha, the purchased shares are credited to your demat account and held on your behalf. You become the rightful owner of those shares, and you have the freedom to sell them whenever you wish, based on your investment strategy.
CNC orders are primarily used by long-term investors who aim to create wealth over time through capital appreciation and dividends. Such investors have a fundamental approach to investing, focusing on the company’s financials, industry trends, and long-term growth prospects.
To place a CNC order in Zerodha, you need to follow these steps:
- Log in to your Zerodha trading account using the web or mobile app.
- Select the stock you want to buy by searching for its symbol or name.
- Click on the “Buy” option for that particular stock.
- Choose the CNC order type.
- Specify the quantity of shares you want to purchase.
- Enter the price at which you are willing to buy the shares or select the “Market” option for the current market price.
- Review your order details and confirm the order.
- Once the order is executed, the shares will be credited to your demat account.
One significant advantage of using CNC orders is that they do not have any time restrictions. You can hold the purchased shares for as long as you desire without any compulsion to sell them on the same day. This allows investors to capitalize on long-term market trends and hold onto stocks with growth potential.
CNC orders also offer the opportunity to earn dividends. When you own shares of a company, you become eligible to receive dividends if the company decides to distribute profits to its shareholders. Dividends are a way for companies to share their earnings with their investors, and they can provide a regular income stream for long-term investors.
Another benefit of using CNC orders in Zerodha is the flexibility to convert them into intraday orders if needed. This means that if you have purchased shares through a CNC order but later decide to sell them on the same trading day, you can convert the CNC order into an intraday order and sell the shares accordingly.
However, it is essential to note that CNC orders come with certain risks. The value of stocks can fluctuate in the market, and there is a possibility of incurring losses if the share price declines. It is crucial to conduct thorough research and analysis before making any investment decisions and to diversify your portfolio to manage risk effectively.
Final Conclusion on What is CNC in Zerodha
In conclusion, CNC orders in Zerodha provide investors with the opportunity to buy and hold stocks for the long term. This order type is suitable for investors who have a fundamental approach to investing and aim to create wealth over time. By using CNC orders, investors can take advantage of capital appreciation, dividends, and the flexibility to hold shares as per their investment strategy.