
What is Intraday and Delivery Trading – All you need to know

By
Arihant Team
If you’re relatively new to the stock market, you probably considered getting into it for one of two reasons – because it’s a good place to make quick money or because it’s a good place to create long term wealth to meet your financial goals. Or maybe your motivation to start trading comes from a combination of the two. Either way, understanding intraday and delivery trading, the difference between the two, and which one works best for you, is essential when you start putting your money in the stock market. In this article, we’re going to help you understand all you need to know about intraday and delivery trading – to help you make more informed trading decisions. Let’s jump in!
In This Article
- 🧐 What is Intraday Trading?
- What is Delivery Trading?
- 🤨 How to Decide Between Intraday and Delivery Trading
- So, what's the best course of action?
🧐 What is Intraday Trading?
- Intraday means within the day. As the name suggests, intraday trading is when you buy and sell a particular stock or a security on the same day, with the goal of making a profit from the changes in share prices that occur within a single trading session.
- Intraday traders use real-time charts to monitor the stock prices and make quick decisions. They use different charts depending on how fast they want to trade. For example, high-speed traders or those who do intraday scalping often use one- and five-minute charts. Scalping is a method of making many trades in a day to make money from small changes in a stock’s price.
Intraday Trading | |
Pros | Cons |
- Potential for high returns within a short time frame. | - Higher risk due to market volatility and short time frame. |
- Lower brokerage fees due to frequent trading. | - Potential for higher brokerage fees for infrequent trades. |
- Ability to take advantage of small price movements. | - Requires constant monitoring of market trends and news. |
- Flexibility to exit positions quickly in volatile markets. | - Limited time to make informed decisions; prone to errors. |
- Offers opportunities for speculative gains. | - Speculative nature may lead to significant losses. |
Let’s understand how intraday works with an example. Say, you bought 10 shares in X company for INR 5,000 at 11:25 am. By 2:05 p.m., you see the value of those shares is now INR 6,200 so you sell before the market closes. This would be an intraday trade – a profitable one!
- Intraday means within the day. As the name suggests, intraday trading is when you buy and sell a particular stock or a security on the same day, with the goal of making a profit from the changes in share prices that occur within a single trading session.
What is Delivery Trading?
- Intraday means within the day. As the name suggests, intraday trading is when you buy and sell a particular stock or a security on the same day, with the goal of making a profit from the changes in share prices that occur within a single trading session.
- Intraday traders use real-time charts to monitor the stock prices and make quick decisions. They use different charts depending on how fast they want to trade. For example, high-speed traders or those who do intraday scalping often use one- and five-minute charts. Scalping is a method of making many trades in a day to make money from small changes in a stock’s price.
Intraday Trading | |
Pros | Cons |
- Potential for high returns within a short time frame. | - Higher risk due to market volatility and short time frame. |
- Lower brokerage fees due to frequent trading. | - Potential for higher brokerage fees for infrequent trades. |
- Ability to take advantage of small price movements. | - Requires constant monitoring of market trends and news. |
- Flexibility to exit positions quickly in volatile markets. | - Limited time to make informed decisions; prone to errors. |
- Offers opportunities for speculative gains. | - Speculative nature may lead to significant losses. |
Let’s understand how intraday works with an example. Say, you bought 10 shares in X company for INR 5,000 at 11:25 am. By 2:05 p.m., you see the value of those shares is now INR 6,200 so you sell before the market closes. This would be an intraday trade – a profitable one!
- Intraday means within the day. As the name suggests, intraday trading is when you buy and sell a particular stock or a security on the same day, with the goal of making a profit from the changes in share prices that occur within a single trading session.
🤨 How to Decide Between Intraday and Delivery Trading
There are several factors to consider when choosing between intraday and delivery trading. One key consideration revolves around your objectives in the stock market, while another centers on the amount of time and effort you can dedicate to trading.
For intraday traders, the goal often entails maximizing returns with minimal investment within a short timeframe. However, achieving this requires extensive research, monitoring market fluctuations closely, and a solid grasp of technical analysis. It's important to note that intraday trading also comes with high risk, and without a proper strategy, it can resemble gambling.
On the other hand, delivery traders typically adopt a long-term approach, aiming to build a portfolio for returns over months, years, or even decades. This strategy relies more on fundamental analysis rather than technical analysis, and there's less need to track market fluctuations closely since the focus is on long-term returns. Additionally, delivery trading tends to involve less volatility, as stocks are held for extended periods.
Parameters | Intraday Trading | Delivery Trading |
Risk | Greater risk due to short-term nature; subject to market volatility. | Lower risk due to long-term nature; profits less susceptible to short-term fluctuations and market corrections. |
Time Requirement | Requires full attention during market hours (9 a.m. to 3:30 p.m.); treated as a full-time job. | Requires less constant monitoring; suitable for individuals with other full-time commitments. |
Commissions & Tax | Lower fees and brokerage; low Securities Transaction Tax (STT). | High Securities Transaction Tax (STT) but many brokers don’t charge delivery brokerage. |
Liquidity | Invested amount can be quickly recovered at any time; not blocked through asset purchase transaction. | Invested amount can be quickly recovered at any time; not blocked through asset purchase transaction. |
Margin Benefits | Lower margin requirements; allows for trading larger positions with smaller capital; higher risk. | Typically requires full payment for shares; funds remain tied up until the holding is sold. |
Corporate Actions | Not eligible for additional profits through corporate actions like dividends, bonuses, and stock splits. | Can benefit from corporate actions such as dividends, bonuses, rights issues, and stock splits. |
Analysis | Requires technical analysis; utilizes indicators and strategies like VWAP, scalping, and swing trading. | Relies on fundamental analysis; involves studying companies with strong fundamentals based on business environment and financial situation. |

So, what's the best course of action?
Many experts recommend long-term investments if you’re looking to create gains over time and have limited time to monitor your portfolio daily.
If you possess skills in technical analysis, have a knack for chart patterns, and can dedicate time to trading, intraday trading might be worth considering. However, if you're not inclined to delve deeply into stock trading, there's no need to choose. You can opt for delivery trades to invest for the long term and make occasional intraday trades when opportunities arise. For investors focused on wealth creation over the long term, delivery trading is often the preferred option.
Related Topics