Intraday Trading
Buying and selling the same security within a single trading session so that no position is carried overnight.
How it is identified
Test: the position is opened and closed within the same trading day, leaving a net quantity of zero at the close
Unit
qualitative
In depth
Intraday positions attract higher leverage and lower securities transaction tax on the sell side, and they never enter the demat account because nothing is delivered. That leverage is the whole risk: a 1% adverse move against a five-times leveraged position is a 5% loss on capital, and brokers auto-square positions when margin is breached. Intraday gains are taxed as speculative business income in India, not as capital gains, which surprises many first-time traders at filing time. Costs also compound fast, since every round trip pays the full charge stack.
Worked example
With five-times leverage, ₹1,00,000 of capital controls ₹5,00,000 of stock. A 1% fall costs 1% x 5,00,000 = ₹5,000, which is 5% of the capital. A 20% adverse move would wipe the capital out entirely.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Intraday Trading” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.