Difference between Intraday and Delivery Trading

Difference between Intraday and Delivery Trading

Here’s the difference between Intraday and Delivery trading. Intraday Trading is a trade in which the purchase and sale of shares is carried out on the same day before the market closes.

Instead, Delivery Trading is a type of trading in which the investor buys a stock one day and sells it at a later date, after holding it for several days.

This means that the investor buys the stock then holds it for a certain period of time. After that investors can sell their shares whenever they want.

It is often said that the stock market gives you huge profits when you invest your money for a long period of time.

However, investors can also earn good returns in the short term when investors keep an eye on market trends and indicators.

Good Intraday and Delivery Trading there are two ways to trade in the stock market. So, in this post, we will educate you about the difference between Intraday and Delivery Trading.

What is Intraday Trading?

Intraday Trading is when the buying and selling of stocks occurs on the same day. In short, the execution of both parts of the transaction takes place on the same trading day using an online platform such as a website or app.

Therefore, the net ownership of the investor will be zero. Furthermore, if the investor does not take a position at the end of the trading day, the stock is automatically sold. The shares are sold at the closing price of the day below the specified brokerage fee.

In Indonesia, the stock market opens at 05:00 wib and closes at 04: 00 wib the next day. Intraday Trading occurs when the buying and selling of stocks occurs between those hours, regardless of profit or loss.

Investors conduct Intraday trading with the sole purpose of making a profit by watching the movement of market indices, namely Nifty and Sensex. People also call it Day Trading.

Points To Note

  • Investors can enter and exit the market on the same day.
  • If the investor does not close or reduce the open position, fifteen minutes before the market close, then the broker can close it automatically.
  • To start Intraday trading, you need to open an online trading account with a stockbroker.
  • To conduct Intraday trading, the investor needs to choose: type of product-Intraday.
  • Stockbrokers give investors a certain percentage margin to make trades.

Examples: Suppose an investor buys a stock at 11: 00, then the investor must sell it before the market closes. If the Investor fails to sell the stock before the market close, then the stock is automatically squared.

What is Delivery Trading?

When the investor does not sell the stock on the same day, where he bought it, then it is called Delivery Trading. In short, in such trading, the execution of only one part of the transaction takes place on the trading day.

This is because it allows investors to hold the stock for the long term. One cannot trade Delivery without a Demat account. Demat accounts are like bank accounts for storing stocks, not money.

As soon as you buy shares of any company on a Delivery basis, the investor becomes the legal owner of the shares. At the execution of Delivery, shares appear on the account of the Investor Demat. After that, the investor has the right to sell his shares at any time.

More precisely, when the investor buys shares, they are transferred to his demo account in Trading + 2 days. In the same way, when an investor sells shares they are debited from the Demat investor’s account on Trading + 2 days.

Points To Note

  • In Delivery Trading, investors hold stocks for a longer period of time and wait for the right time to cash out and earn substantial returns. Therefore, investors need to be patient.
  • Investors can only sell the stock if they have bought the stock on a certain trading day and then wait for the trade plus 2 business days. And when the shares start to go to the Investor’s Demat account, he can sell them at any time, be it after 10 days, 10 years or more. That is, the investor cannot sell the shares until they do not appear in the Demat account in question.
  • Stock brokers provide e-margin facility in terms of Delivery Trading as well. However, in order to take advantage of the margin facility, investors must mortgage the shares that are in their Demat account. The Investor can withdraw the money received in the form of margin or he can invest the same to buy more shares.
  • Brokers charge interest on margin facilities at a high rate.

Difference between Intraday and Delivery Trading

The points listed below explain the difference between Intraday and Delivery Trading:

  1. In Intraday trading, as the name suggests, stocks bought within a day are sold on the day they expire. This means that the investor sells the stock before the close of the market for the day. Now you must be asking, What if the stock doesn’t sell at the end of the day? Well, in this case, the shares are squared automatically, at the closing price. On the contrary, in Delivery Trading, investors hold shares for some time, having bought them. He does it to get a good return over time.
  2. In Intraday Trading investors trade with the aim of making a profit. On the contrary, in Delivery Trading, investors invest in stocks with the goal of growing money over time and reaping high returns.
  3. In Intraday trading, there is always a time limit for selling stocks on the same day. On the contrary, in the case of Delivery Trading, the investor can hold the stock for as long as he wants. This is because there is no time limit to sell it.
  4. Temporary Intraday trading it is best for professionals, as they are very risky and require strong analysis to trade wisely. However, even someone with little knowledge of the stock market can make money from Delivery Trading.
  5. In Intraday trading, the risk factor is high but it is also a one-day affair. While in Delivery Trading the risk factor is relatively smaller. But at the same time, since the investor holds the position for a long period of time, the risk will always be present.
  6. In Intraday Trading, You can take advantage of leveraged prices during the trading day. However, investors need to be careful to plan and execute entry and exit at the right time. Also, one should pay attention to price movements throughout trading hours and use charts. However, with Delivery Trading, the investor can buy the stock once and then sit back and relax for as long as he wants, as there is no time limit. He can sell the stock at any time after the open position.
  7. Stockbrokers offer high leverage or margin to Intraday trading. This means that investors can buy more shares using the leverage option than the amount they have in their account. In terms of Delivery Trading, the investor must make a full payment in advance. That means the completion of Delivery Trading occurs in cash. Investors can buy shares only if the account has sufficient balance.

That’s the difference between Intraday and Delivery Trading. I hope this article was helpful to you! Thank you for visiting.

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