Intraday trading is a unique opportunity to capitalise on the price movements of a share within a day. As the name suggests, intraday trading is also referred to as Day Trading. When a trader participates in an intraday trade, it essentially means that they take a position on a stock for a day and speculate whether the stock prices will go up or down. Intraday traders get something known as leverage that allows them to invest more than their available capital and improves their potential return on investment. Intraday trading guidelines provided by SEBI, make it mandatory for traders to square off their position by the end of the day or else their brokers will do so.
Intraday trading differs from regular trading in a few aspects.
In regular trading, you buy stocks that are physically delivered to your Demat A/c. This means that you have complete ownership of the stock. Intraday trading, however, allows you to take a position on the stock and not completely own it.
Another point of difference lies in the time duration for both forms of trading. Intraday trading happens in a day whereas regular trading does not have a timeline associated with it and the trader can keep the stocks in possession for as long as they want.
Intraday trading allows a trader to capitalize on falling markets as well as it has a provision to short sell whereas you cannot do the same in regular trading.
There are various advantages of trading intraday as it provides a trader with a host of opportunities to make a profit from the stock market on regular basis. Let us understand these advantages one by one.
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