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What is Intraday Trading?

  • Highlights

  • Intraday trading – buy and sell stocks on same trading day

  • Specify if an order is specific to intraday trading

  • If position is not closed it gets squared off automatically

Intraday trading means that you buy and sell stocks on the same trading day. Intraday trading is also known as Day Trading. Share prices keep fluctuating throughout the day, and intraday traders try to draw profits from these price movements by buying and selling shares during the same trading day. Intraday Trading refers to buying and selling of stocks on the same day before the market closes. If you fail to do so, your broker may square-off your position or convert it into a delivery trade. This kind of trading is always beneficial whether a person is an experienced trader or beginner as the indicators and trends of the market will guide them properly.

Basics of Intraday Trading:

The day trading refers to buying and selling of stocks on the same day. It is done using online trading platforms. Suppose a person buys stock for a company, they have to specifically mention ‘intraday’ in the portal of the platform used. This enables the user to buy and sell the same number of stocks of the same company on the same day before the market closes. The purpose is earning profits through the movement of market indices. It is also referred to as Day Trading by many.
Stock market earns you great returns if you are a long-term investor. But even on the short term, they can help you earn profits. Suppose a stock opens trade at Rs 500 in the morning. Soon, it climbs to Rs. 550 within an hour or two. If you had bought 1,000 stocks in the morning and sold at Rs 550, you would have made a cool profit of Rs 50,000 – all within a few hours. This is called intraday trading.

Intraday Trading- Features

On online trading platforms, you have to specify if an order is specific to intraday trading. In that case, you take a position on the stock and close it within the trading hours on the same day. If you do not close it yourself, the position gets squared off automatically at the market closing price.
You don’t get ownership of the stocks you buy and sell in intraday trading. The goal of intraday trading is not to own the stocks, it’s rather to make profits by reaping the benefit of price movements during the day.

Leveraging: Leveraging means borrowing money from your broker to enhance your buying power, with the aim to amplify the potential returns on an investment. You can take the benefit of leverage in Intraday trading to take a larger exposure while paying a fraction of the open position. There are terms and conditions associated around leveraging that you should get yourself familiar with from your broker to tap its benefits.

• On online trading platforms, you have to specify if an order is specific to intraday trading.
• You take a position on the stock and close it within the trading hours on the same day.
• If you do not close it yourself, the position gets squared off automatically at the market closing price.
• The goal of intraday trading is not to own the stocks, it’s rather to make profits by reaping the benefit of price movements during the day.

Additional Read: How to Start Trading In India

Intraday Trading Indicators

1. Moving Average: Moving averages is the most commonly and widely used indicator. It is the line on the stock chart which connects the average closing rates over a given period. If you are considering a longer period, the moving average will be more well-grounded. Moving averages let you comprehend underlying movement of price as most of the times price of a stock doesn’t move only in one direction.
2. Bollinger Bands: Bollinger bands is a bit more advanced than that of moving averages. It comprises 3 lines - the moving average, an upper limit and a lower limit. With all these, you can comprehend underlying movement of the stocks better than just by moving averages.
3. Momentum Oscillators: Sometimes stock prices move unrelated to the bullish or bearish market trends.
4. Relative Strength Index (RSI): It is calculated in index form which narrows down the RSI score ranging between 0 to 100. The index increases when the price of the stock rises and vice versa.

Intraday Trading vs. Delivery Trading

Unlike Intraday trading, if you buy a share but do not sell it on the same trading day, it is called delivery trading. In delivery trading, the stocks you buy are credited to your demat account. You hold it for as long as you want, for days, months or years before selling it. You continue to have the ownership of these stocks. In delivery trading, investors consider the long term price movement of the stocks to book profits rather than its price fluctuations within the day.


Additional Read: How to Open Demat Account Online

What is the brokerage charge for intraday trading?

With Bajaj Financial Securities Limited (BFSL), you can get the benefit of low brokerage rates for intraday trading. Through our affordable subscription plans, you can trade at a flat fee per order and save significantly on brokerage costs. Below are the brokerage charges for intraday trading under the 3 subscription packs offered by BFSL:

Subscription packs from BFSL
Equity Intraday trading brokerage
Freedom Pack ₹ 17 / order
Beginner Pack ₹ 9 /order
Professional Pack ₹ 0.99 / order

Full details of the 3 packs are given below:

FREEDOM PACK
BEGINNER PACK
PROFESSIONAL PACK
Yearly Subscription Charges: Free Yearly Subscription Charges: ₹ 500 + GST Yearly Subscription Charges: ₹ 999 + GST
Demat AMC: 1st yr: Free, 2nd yr Onwards: ₹ 365 + GST Demat AMC: ₹ 899 + GST Demat AMC: ₹ 899 + GST
Products Included:
. Equity
. Derivative
Products Included:
. Equity
. Derivative
Products Included:
. Equity
. Derivative
. Margin Trade Financing
Brokerage Rate:
. Equity Delivery: 0.10%
. Equity Intraday & F&O: ₹ 17 /order
Brokerage Rate:
. Equity Delivery: ₹ 0.99 /order
. Equity Intraday & F&O: ₹ 9 /order
Brokerage Rate:
. Equity Delivery & Intraday: ₹ 0.99 /order
. F&O: ₹ 5 /order
. MTF Interest Rate: 0.05% / Day

Want to start trading online? Open your Demat and trading account today with Bajaj Financial Securities through 100% paperless process and get your account in less than 15 minutes.

Intraday Trading FAQ :

What is the difference between day trading and intraday trading?

Day trading and Intraday trading are different terms but have the same meaning.
Buying and selling of shares in the stock exchange on the same day is known as Intraday trading. As buying and selling happen on the same day, it is also known as day trading.
The prices of shares keep moving up and down in a day, the trader makes a profit from the movement of the share price. The shares do not get stored in the demat account.

How to do intraday trading?

A trader will have to select the Intraday trading option in the online trading platform. It is not available by default as an option but needs to be started by filling out an application form. The brokerage charges for intraday trading are different from the delivery based trading.
In the case of intraday trading, if a trader takes a position in the stock market, he will have to close the deal within the trading hours of the same working day. If the position is not closed by the trader, the stock will automatically get squared off at the closing price.

Advantages and disadvantages of Intraday Trading?

Advantages of Intraday Trading

  • The trader can make profits based on the movement of the market price of the stocks.

  • The trader can avoid delivery charges.

  • If the trader doesn’t close the deal, the position gets squared off automatically, if it's set in the trading platform.

Disadvantages of Intraday Trading

  • The trader will not own the shares he traded for the day.

  • The trader incurs a loss if the closing rate is not conducive. If the market is unfavourable, he may have to forego profit.

How does intraday trading work?

To perform intraday trading, the trader should select the intraday trading option in the online platform of the respective Depository Participant(DP) or the stockbroker.
In intraday trading, the trader takes a position in the stock market and once the price movements of the specific share price are conducive, he will close the deal. If the position taken during the day is not closed by the trader, it automatically takes the reverse position at the closing market rate. The trader does not own the shares at the end of the day as the intention of the trader is to book profit based on the movement of the price.

Disclaimer: Investments in securities market are subject to market risk, read all the related documents carefully before investing. Visit our website for other Terms & Conditions.

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