- Date : 27/09/2021
- Read: 4 mins
Since the lockdown started, many people have opened demat accounts and started trading directly in stocks. In this article, we explore intraday trading, how to choose stocks for trading, key indicators, and some suggestions for trading.
As of August 2021, the equity markets are at an all-time high, and so is the interest in trading stocks directly. While intraday trading looks very exciting, it can burn a hole in your pockets if not done properly. In this article, we will understand what intraday trading is, and how to place intraday orders.
What is intraday trading?
Intraday trading refers to buying and selling the same number of shares of the same company on the same day. For example, on 20 August 2021, let’s assume that Rajesh decides to do an intraday trade by buying 100 shares of Kotak Bank. Since the above is an intraday trade, Rajesh will have to sell 100 shares of Kotak Bank on 20 August 2021 itself, before the market closes.
Some people refer to intraday trading as day trading. As the buy and sell orders for the stock are placed on the same day, there is no transfer of ownership of the traded shares. Traders do intraday trading to make quick profits by capitalising on the direction in which share prices move. Intraday trading carries a high risk but also has the potential to deliver high profits.
How to place an intraday order with Zerodha
Let’s consider an example. While placing an intraday order with Zerodha, Rajesh will have to select the ‘Intraday’ option as in the screenshot below.
As seen in the above image, Zerodha allows traders to square off open intraday positions in the equity cash market till 3:20 PM. After this time, the system closes any open positions on behalf of the traders.
Intraday trade profit/loss
The trade profit/loss will be the difference between the selling price and the buying price. In the above example, Rajesh’s profit/loss will be 100 x (Selling price – Buying price of Kotak Bank shares). Please note that while Rajesh has traded in the Kotak Bank shares, he has not taken delivery of shares as it is an intraday trade. Hence, no transfer of ownership of Kotak Bank shares will take place in this trade.
Intraday trading with Upstox
While purchasing a stock, Upstox offers you the option of selecting "Intraday" or "Delivery" under the product field as shown in the below image.
After selecting "Intraday" as the product type, you can fill the other order details and complete the "Buy" order.
Intraday trading with ICICIDirect
When placing orders with ICICIDirect, you have to select the "Square Off Mode". When you select this option as "Broker", the order is considered as an intraday order.
Once you fill the remaining details and select the "Buy Now" button, your order will be placed.
Intraday tradiing with Sharekhan
Sharekhan allows you to take intraday positions under the Big Trade+ option. Under the "Action" drop down menu, you can select from the following four options: Buy, Sell, Buy Big Trade+, Sell Big Trade+.
With a Big Trade+ order, you can place the stop loss price. If the stock moves in your opposite direction, then once the stock reaches the stop loss price, your order will get squared off. With a Big Trade+ order, you can also specify a Book Proft Trigger Price. In this case, when the stock price moves in your direction, once the book profit price is reached, your profit will booked and the trade will be closed.
In the above section, we have explained how you can do intraday trades with various brokers like Zerodha, Upstox, ICICIDirect, Sharekhan. But, you should exercise caution while doing intraday trading as it can prove risky, if the trade goes in your opposite direction.
Intraday trading is both: Exciting and risky at the same time
You must have read about news articles of how a trader made a few thousand or lakhs with just a single intraday trade. These kinds of news events are good enough to excite you and jump on to the intraday trading bandwagon. But, what does not get reported in the news is when some intraday traders have lost all their capital and even gone into debt. So, you should do intraday trading with strict stop losses. It is understandable to get excited with intraday trading, but it is equally important to have a proper risk management plan in place, or else it can burn a hole in your pocket.
Related: What are the intraday trading charges in India?
As of August 2021, the equity markets are at an all-time high, and so is the interest in trading stocks directly. While intraday trading looks very exciting, it can burn a hole in your pockets if not done properly. In this article, we will understand what intraday trading is, and how to place intraday orders.
What is intraday trading?
Intraday trading refers to buying and selling the same number of shares of the same company on the same day. For example, on 20 August 2021, let’s assume that Rajesh decides to do an intraday trade by buying 100 shares of Kotak Bank. Since the above is an intraday trade, Rajesh will have to sell 100 shares of Kotak Bank on 20 August 2021 itself, before the market closes.
Some people refer to intraday trading as day trading. As the buy and sell orders for the stock are placed on the same day, there is no transfer of ownership of the traded shares. Traders do intraday trading to make quick profits by capitalising on the direction in which share prices move. Intraday trading carries a high risk but also has the potential to deliver high profits.
How to place an intraday order with Zerodha
Let’s consider an example. While placing an intraday order with Zerodha, Rajesh will have to select the ‘Intraday’ option as in the screenshot below.
As seen in the above image, Zerodha allows traders to square off open intraday positions in the equity cash market till 3:20 PM. After this time, the system closes any open positions on behalf of the traders.
Intraday trade profit/loss
The trade profit/loss will be the difference between the selling price and the buying price. In the above example, Rajesh’s profit/loss will be 100 x (Selling price – Buying price of Kotak Bank shares). Please note that while Rajesh has traded in the Kotak Bank shares, he has not taken delivery of shares as it is an intraday trade. Hence, no transfer of ownership of Kotak Bank shares will take place in this trade.
Intraday trading with Upstox
While purchasing a stock, Upstox offers you the option of selecting "Intraday" or "Delivery" under the product field as shown in the below image.
After selecting "Intraday" as the product type, you can fill the other order details and complete the "Buy" order.
Intraday trading with ICICIDirect
When placing orders with ICICIDirect, you have to select the "Square Off Mode". When you select this option as "Broker", the order is considered as an intraday order.
Once you fill the remaining details and select the "Buy Now" button, your order will be placed.
Intraday tradiing with Sharekhan
Sharekhan allows you to take intraday positions under the Big Trade+ option. Under the "Action" drop down menu, you can select from the following four options: Buy, Sell, Buy Big Trade+, Sell Big Trade+.
With a Big Trade+ order, you can place the stop loss price. If the stock moves in your opposite direction, then once the stock reaches the stop loss price, your order will get squared off. With a Big Trade+ order, you can also specify a Book Proft Trigger Price. In this case, when the stock price moves in your direction, once the book profit price is reached, your profit will booked and the trade will be closed.
In the above section, we have explained how you can do intraday trades with various brokers like Zerodha, Upstox, ICICIDirect, Sharekhan. But, you should exercise caution while doing intraday trading as it can prove risky, if the trade goes in your opposite direction.
Intraday trading is both: Exciting and risky at the same time
You must have read about news articles of how a trader made a few thousand or lakhs with just a single intraday trade. These kinds of news events are good enough to excite you and jump on to the intraday trading bandwagon. But, what does not get reported in the news is when some intraday traders have lost all their capital and even gone into debt. So, you should do intraday trading with strict stop losses. It is understandable to get excited with intraday trading, but it is equally important to have a proper risk management plan in place, or else it can burn a hole in your pocket.
Related: What are the intraday trading charges in India?
