For Quick Alerts
For Daily Alerts

What Is The Difference Between Intra Day Trading And Delivery Trading?


You can buy and sell shares with a very different perspective and a very different time horizon.


What Is The Difference Between Intra Day Trading And Delivery Trading?
Generally, there are many ways and segments in which you can trade in shares.

Here we try and explain the difference between intra day trading and delivery trading:

Difference 1 - the time frame

One of the biggest Differences Between Intra Day Trading And Delivery Trading is the time span.

In intra day trading, as the name suggests investors will invest only for a few hours. What this means is that they tend to square off their position after a few hours and definitely on the same day.

Let us cite this with an example. Let us say that you bought shares of Punjab National bank at 10.00 am and wish to square anytime during the day, it would be an intra day.

On the other hand in dlievery based tradign, you buy the stock to hold for a long period of time.

Difference 2 - Dividends, rights, bonus shares

In intra day trading, since you never hold the shares, you do not get dividends, rights and bonus shares, In fact, you do not get any corporate benefits.

On the other hand those who take delivery of shares tend to get all of the above benefits listed.

Difference 3 - Shares in the DP account

One of the other Differences between Intra Day Trading And Delivery Trading is that in the case of intra day trading, you would never have shares in your DP account. In the case of delivery trading, the shares would always be reflected in your DP account.

Difference 4 - Objectives are different


In both the cases the objectives are totally different from each other. In the case of intra day trading, you wish to make quick money in a single day, while in the case of delivery based trading, you want to hold the shares for a longer time frame.

Difference 5 - Margins

In the case of intra day trading, the broker may grant you margins. Normally, this could be around 15 per cent of the total value of the trade. The margins really differ from broker to broker.

There is no such facility in the case of delivery based trading. You have to pay the entire amount and only then would you be allowed full delivery of your shares.

Should you go for intra day or delivery based trading?

This is a question that one cannot really answer. Some individuals do not believe in holding shares for the long term. They want instant profits. In this case they trade intra day and book profits and losses accordingly.

In other cases, there are individuals who believe that they can make money only in the long term and hence must hold onto shares. These individuals will hold onto shares for many years, and receive dividends, rights and bonus shares. These shares are even held until death and transferred to the legal heir therafter.

It is extremely difficult to say which strategy to adopt. Individuals have a different objective and no one formula is best suited for all.

Read more about: trading shares
Story first published: Friday, June 10, 2016, 9:56 [IST]
Company Search
Get Instant News Updates
Notification Settings X
Time Settings
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X