Scalping
Trading for very small price increments many times a day, holding each position for seconds to minutes.
Formula
Net Profit per Trade = Gross Price Movement Captured - Round-Trip Transaction Costs
Unit
₹
In depth
Scalping lives or dies on transaction costs, because the gross move targeted is often smaller than the round-trip cost stack of brokerage, STT, exchange fees, stamp duty, GST and the bid-ask spread. It requires very high win rates, since each winner is tiny and a single large loss erases many of them. Latency, tick size and depth matter far more than any view about the company. It is the strategy most likely to produce heavy turnover, a large tax and cost bill, and a net loss even with a majority of winning trades.
Worked example
A scalper targets ₹0.50 on a ₹300 stock, or 0.17%, with round-trip costs of about ₹0.15 per share including the spread. Net capture is ₹0.35. One losing trade of ₹2.00 wipes out 2.00 / 0.35 = about six winners.
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 “Scalping” 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.