Intraday trading is buying and selling stocks on the same day. Many traders do this type of day trading to earn quick money. In intraday trading, the trader sets the target to execute the transaction. The transaction executes, once the stock hits that price. After understanding the intraday trading meaning, let us look at an example of the same.
Benefits of Intraday Trading
Brokerage commission in intraday trading is very low. The brokerage in intraday trading is 1/10th in comparison to positional trading.
By following a disciplined approach, one can make high returns in intraday trading.
Intraday trading prevents overnight risk.
Intraday traders have a dual opportunity to make profits. One is by purchasing and selling the stocks on the same day. Other is by short selling and covering the position later in the day.
The intraday trader has the luxury of cash liquidity right from the start of the trading session. This gives him the opportunity to take new positions in new stocks each day. He gets the advantage of free capital in hand to meet his daily personal needs.
Intraday trading is less risky because overnight bad events do not affect the profits of the intraday.
Intraday trading provides immense learning opportunities to the trader. The trader can learn new techniques and strategies while taking intraday positions.
Intraday Trading Meaning and Delivery?
Intraday trading is buying and selling the shares on the same day. On the other hand, delivery trading is purchasing the shares today and not selling them on the same day. In simple words, delivery trading is taking the position in stocks to next trading sessions.
What is Square off in Trading?
The investors indulging in day trading/intraday trading use square off trading style. In this style of trading, the trader reverses the position taken by him earlier in the day. Square off trading position is for those traders who intend to earn intraday profits.
Example of Intraday Trading
Suppose a trader buys 100 shares of Reliance Industries on 8th April 2019. The same trader then sells the shares of the company on the same day before the closure of the markets. Here, the trader squares off his position in the same trading session. This is called as intraday trading.