Difference Between Intraday & Delivery

4 mins read
by Angel One

For any student of investment, the greatest hurdle remains understanding the many jargons that a stockbroker will casually throw at you. If you have been into the same situation, then you have come to the right place. Apart from helping you with investment decisions, we also educate you on various stock market terms to help you grow as a seasoned investor.

If you have recently ventured into the stock market, you must have already come across the question of whether you prefer intraday trading or want delivery of stocks. This article will help you understand the topic of intraday vs delivery trading and what is the difference between them. 

Understanding the difference between intraday and delivery is essential for a  new investor to make the right investment choices.

So, there are two ways in which one can trade in the stock market. One of these is intraday trading. This means you can buy/sell stocks on the same day, i.e., intraday, during the trading hours specified by the stock exchange. This way, you buy shares when the price is low and sell when their prices are high. You are benefiting from the movement of price. This is intraday trading.

Then, what is delivery that you keep hearing about? It means, you buy shares and hold them overnight and take delivery of them, then the stocks get reflected in your Demat account. You can sell them whenever you want. When you take up delivery trading, you are likely to be someone who is more interested in investment opportunities rather than only trading. As an investor, you tend to think more long-term.

That is one clear difference between intraday and delivery trading. The other intraday vs delivery trading aspect lies in the capital required. For intraday trading, the capital you need is low as you can make payments in margins. This small payment can be used to gain big based on price movement. You also have a margin available so you can carry out transactions that have a value that is many times your capital. 

Then, what happens in the case of delivery trading? How much fund does it require you to take delivery of stocks? You should remember that in the case of delivery trading, you would be needed to make complete payments upfront. So, you have to plan well and invest on the basis of your budget and your goals.  It is another significant difference between delivery vs intraday trading that you must stay aware of. 

However, these are the simple differences of definition between the two. Intraday and delivery trading also involve different degrees of risks.

There are risks in both. When it comes to intraday, the risks are a one-day affair. In delivery trading, your positions are held for longer, so the risk is always there. However, this is not to say intraday trading is stress-free or risk-free. In fact, intraday trading can seem riskier because any profit or loss you make is based on the performance of security only on that day. In delivery trading, even if on a day security is not doing well, you stand to gain by way of bonus or dividends. 

Intraday trading lets you leverage price advantages during a day. But it demands that you remain watchful to plan right entry and exit carefully. You need to pay minute-to-minute attention to price movements during the day, use trading charts, and research companies closely. You will have to learn about high liquidity stocks, volatility, and other factors that help you filter stocks for intraday trading.

When it comes to delivery trading, you can be a little more relaxed as there’s no limit on the time needed to sell your securities. That’s one more intraday vs delivery aspect you should consider before you start trading.

One more aspect that separates the two is short selling. An advantage of intraday trading is that you can sell shares that you don’t own. You borrow stock from the broker, sell it on the market, and hope to buy it back from the market for a lower price before the end of trading for the day. This way, you can gain, even when a security’s price is falling. However, there are risks involved in this, and you may need some experience in day trading to take it up.

Delivery vs intraday trading is one of the most discussed topics in the equity market. In simple terms, if you are looking for a quick profit from share trading, then the intraday day is the right option to choose. But as an investor, you must look at long-term investment. You can select both options or concentrate on anyone depending on your goals as an investor.