Glossary
What is Intraday Trading? Meaning, Example & Why It Matters
Buying and selling the same security within one trading day, so no shares are delivered to your demat account.
Intraday trading means opening and closing a position on the same day. You might buy a stock in the morning and sell it before the market closes, or short-sell first and buy back later. Because the position is squared off the same day, shares never enter your demat account, and no delivery takes place.
Why Intraday Trading matters to you
Intraday trading has a different cost profile from delivery. Brokerage is usually charged per order, and statutory charges like STT apply at intraday rates. Since you are trading more often and aiming for small price moves, these charges can take a large share of your profit, and a winning trade can turn into a loss after costs.
It also carries high risk. Prices can move sharply within minutes, and leverage, if used, magnifies losses. Studies by SEBI have found that a large majority of individual intraday traders lose money over time. Brokers will usually auto square-off open intraday positions near market close, sometimes with an extra fee.
Practical tip: know your break-even before entering a trade, including all charges, and always use a stop-loss. Start with small sizes and keep a trading journal so you can see honestly whether the strategy works after costs.
Example: Illustrative only: if you buy shares worth ₹50,000 and sell them the same day for ₹50,200, your gross profit is ₹200. After brokerage on two orders, STT, exchange charges, SEBI fees, stamp duty and GST, your net profit could be much smaller.
See it in rupees: every charge and tax on a real trade, at every broker. Open the brokerage calculator
Related terms
- GlossaryDelivery Trading
Buying shares and holding them in your demat account beyond the trading day, for days, months or years.
- GlossaryMargin
The money or collateral you must keep with your broker to take and hold leveraged positions.
- GlossaryStop-Loss Order
An order that triggers a buy or sell once the price reaches a set level, used to limit losses on a position.
- GlossarySlippage
The difference between the price you expected for a trade and the price at which it actually executed.
Frequently asked questions
Do I need a demat account for intraday trading?
You typically need a demat account linked to your trading account to trade equities, even though intraday positions are not delivered.
What happens if I forget to close an intraday position?
Most brokers automatically square off open intraday positions before market close, and may charge an extra fee for doing so.
Is intraday trading profitable?
It can be for some, but SEBI data shows most individual intraday traders lose money. Costs, discipline and risk management matter enormously.