Delivery percentage in a script means % of shares which were not squared off the same day out of total shares traded. That means % of shares people actually got them delivered into their demat account. It is generally for long term holding.
A sudden increase in higher delivery percentage hints that people have showed interest to accumulate the shares for long term.
Let’s understand with an example:
Suppose total volume of shares traded in a script Reliance Industries is 10000. Out of which 2000 were bought by traders in morning and 2000 were then sold later in the day (total intraday volume 4000) . Then the rest of the shares taken in delivery is 6000 and delivery percentage is 60%.
How to use delivery percentage in Trading and Investing
Spike in delivery percentage and delivery volumes should be analyzed with stock price change to predict the short-term trend. Take a look into different scenarios below:
Increase in Delivery percent with increase in stock price : This indicates that buyers are expecting the stock price to go up and the sentiment is bullish about buying the stock. Stocks are being purchased with intention to keep it in demat account for long term, therefore giving indication of bullish trend to continue.
Increase in Delivery percent with decrease in stock price: Decrease in price shows a BEARISH trend in stock price, indicating more people are selling. Delivery percentage is high indicates that the selling is done by long term investors and they are offloading their holdings in the stock and the downtrend might continue.
Delivery % across different time periods can be compares to see if the trend has changed recently and is strong enough vs its usual level.