What is Intraday and Delivery Trading?

What is Intraday and Delivery Trading?

Intraday Trading and Delivery Trading are two distinct trading strategies for stock market participants. Here’s a detailed explanation of each:

Intraday Trading

Definition: Intraday trading involves buying and selling stocks on the same day. The positions are closed before the end of the trading session, so no stocks are held overnight.

Key Points:

  • Same-Day Transactions: You need to square off (sell) your positions by the end of the trading day, usually before 3:15 PM. If you don't, 5Paisa will automatically initiate a square-off process from 3:15 PM onwards at the current market price.
  • High Frequency: Typically involves multiple daily trades, aiming to profit from short-term price movements.
  • Leverage: Often uses higher leverage, allowing control over larger positions with a smaller amount of capital.
  • Monitoring: Requires active monitoring of the market throughout the trading day.

Example: If you buy 100 shares of a company at ₹100 in the morning and sell them at ₹105 in the afternoon, you make a profit of ₹500 (minus transaction costs) if you close the position within the same day.

Delivery Trading

Definition: Delivery trading involves buying stocks and holding them for a period longer than a single trading day. You can keep these shares for as long as you wish, even for years.

Key Points:

  • Holding Period: You can buy shares today and choose to sell them anytime in the future, whether that’s a day, a month, a year, or even longer.
  • Lower Frequency: Fewer transactions compared to intraday trading, focusing on long-term price appreciation.
  • Ownership: Shares bought are held in your demat account until you decide to sell them.
  • Less Monitoring: Requires less frequent monitoring as positions are held for a longer period.

Example: If you buy 200 shares of a company at ₹100 and sell them after a year when the price has risen to ₹150, you make a profit of ₹10,000 (minus transaction costs) when you decide to sell.



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