Difference Between Intraday Trading and Delivery Trading.

By Blogger Ji

Learn the difference between intraday and delivery trades, how are the two trades are executed and trades requiring margin to pay and how trades are settled, etc.

In an intraday trade, both legs of a transaction (buy and sell) are executed on the same day, leaving the net holding position at zero. In a delivery trade, only one side of the transaction (buy or sell) is executed in a day. Let us look at the difference between intraday and delivery trading in more detail.

Difference betweeen Intraday Trading and Delivery Trading

How are these trades executed ?

When an intraday trade is executed, you must specifically select the "MIS" option, while in the case of delivery trades, you must select the "NRML" option. Both these trades can be executed through online or offline trading platforms. In both cases, trades will appear in the account with the appropriate tag after being executed.




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Which margins should be paid for trading ?

In the case of intraday trading, stop loss and profit targets are usually entered at the time of trade. This enables the intraday trader to achieve higher leverage as the trade is structured as a cover order. Delivery traders typically impose stop losses and set profit targets based on price movements. The delivery buyer will have to pay the entire amount by T + 1 morning, while the delivery seller must ensure that the DIS broker for the sale reaches the broker by T + 1 morning.

How are the trades settled ?

The real difference between intraday trading and delivery trading is the way trades are cleaned and organized. In the case of intraday trading, trades are closed on the same day, so gains or losses, if any, are credited or debited to the trading account. In case of delivery, the buyer will have to pay the money by T + 1 and receive delivery to the demat account by the end of T + 2. In case of delivery selling, the DIS has to be deposited with the broker on T+1 morning and the bank credit comes in by the end of T+2 day.




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What is more profitable; intraday trading or delivery trading ?

It depends to a large extent on how you trade and execute. Intraday trades are all about technical, charts and news flows. Delivery trades are based on fundamentals such as macros, industry appeal, company performance and more. Intraday trades attract fewer brokerages than delivery trades. Therefore, the focus of intraday trading is more on churn capital, while the delivery trader looks for growth opportunities or long term value.

Delivery Trading VS Intraday Trading.




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