Dp charges on Exiting Sell order

Zerodha
1

I bought 10 shares of company A on Xth day through zerodha. If I sell all those shares on X+10th day and again buy same quantity on same day (i.e. X+10th). Will I be charged with DP charges?

2

Hi @Dp_rathi

There won’t be DP charges because the stock has not left your demat account. A Depository Participant (DP) charge is a fee applied only when securities are sold from a demat account.

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3

I didn’t know this.

I thought DP charges aren’t applicable only on Intraday trades.

So, just to be clear, if existing shares (bought earlier) are sold first, and bought back on the same day, for the same quantity, there will be no DP charges, right ?

P.S.

If the above is true, it kinda answers a question that has been puzzling me, in relation to the ‘Auction Market’.

I think, for me, the only scenario in which selling and buying back the same shares, on the same day would make sense, is when you are selling through the auction market.

I sometimes check the auction market, just to see how it works and if there is really any arbitrage present.

And i often come across some ETFs, that come up for auction, for which the bid quantity will be as low as 1 qty.

And i always wondered, who would be willing to sell just 1 qty and incur DP charges of ~₹15, by selling at just ₹2 or ₹5 above the LTP in the auction market. (i.e., such gains would not even cover the cost of DP charges)

But, now I understand that, they are willing to make marginal gains of ₹5 or ₹10 above the LTP, by selling at auction market and buying it back in cash market, thereby incurring no DP charges.