The stock market can be defined as the public markets that are present for issuing, buying and selling stocks that trade on a stock exchange. Stocks are also known as shares and equities and they represent fractional ownership in an organization. And the stock market is where the traders can buy and sell such company assets. There are various options through which a trader can trade in the market. In this article, we are going to learn about the difference between intraday trading and delivery trading. But to understand the difference between them, we first need to understand these terms individually.
What is Intraday Trading?
Intraday trading is one of the most intricate trading techniques in the stock market. As the name infers, intraday trading is the way of purchasing and selling of stocks and securities on the same day until the closing bell of the stock exchange. On the off chance that an individual neglects to sell the position or purchase, the exchanges are executed consequently during the closing hours. In this case, the stocks and securities are not bought with the goal of an investment. Rather, it is done with the aim of making profits by exploiting the frequent price fluctuations in the stock market for the duration of the day. To turn into an intraday trader, you just need to have a functioning trading account.
What is Delivery Trading?
Delivery Trading can be explained as the process when the stocks that are brought by the traders are bought by keeping the long term perspective in mind and are added to the Demat account. The shares that are claimed by the traders are not directly sold by the system like intraday trading but are sold when the traders need to sell it. They can keep it in their possession for days, weeks, months or years.
Intraday vs Delivery Trading: The Differences
The difference between intraday vs delivery trading is:
- Delivery trade requires a profound examination of the shares and their organizations. As the shares are kept in the trader’s possession for quite a while, the fiscal summaries, profits, business choices of the organization, and so forth all impact buy choices. While in day trade, the trader utilizes in-depth technical analysis to make instant decisions about buying or selling.
- The process of delivery trading can at times stretch out for a really long time. There are no maximum time limits pertaining to when you need to sell the shares you purchased. In case of intraday trade, you need to sell the share you purchase or purchase the shares you sell and square off your position without any carry forward.
- Delivery traders obtain the ownership of shares on the purchase instantly. Whereas, intraday traders do not have any proprietorship at the time of trading, as they earn a profit from demand and supply differences and not the true share value.
- The brokerage in case of intraday trading is very less and the trader simply has to pay an annual fee. Whereas, the brokerage in case of delivery trading is more than that of day trading.
- The commission is higher in case of delivery trading, traders who aim to get maximum profit in limited no of shares, delivery trading is a good option. The commission is comparatively less in case of intraday trading.
- Delivery trade contemplates the long term price movement of the shares while intraday trade considers momentary value uncertainties.
Although intraday trading and delivery trading differ in various aspects, the ultimate goal in both of these trades is for the investor to earn some profit. So if you ask us which one of these two trades is better, our answer would be, it depends on the trader’s personal approach. Different trading types may suit different individuals. So do a bit of research and dive into the share market by choosing to trade in the way that you think works for you.