26 Mar, 2025
4 mins read
Among the many different types of trading are: intraday trading and delivery trading. Each has its features that set them apart. Your choice between these styles will depend on your goals, risk comfort, and trading experience. In this article – we will understand intraday vs delivery trading, the differences between them, and a guide to choosing between the two options.
Intraday trading, also known as day trading, means all trades must be completed before the market closes. Your goal is to make quick profits from short price movements. The risk is high due to market volatility. You need tools like real-time data and technical charts. You'll pay more in fees because you trade often.
Example of Intraday Trade:
Ramesh, a trader purchases 100 shares of Reliance Industries Ltd. at ₹1,276.35 per share in the morning and sells them at ₹1,286.35 before the market closes on the same day. This results in a profit of ₹1,000 (100 shares × ₹10 gain per share).
Delivery trading, or cash trading, involves buying stocks to keep for more than a day. You can hold these stocks for weeks, months, or years based on your long-term plans.
Delivery trading has its own set of traits. There's no set time to sell your stocks. You aim to build wealth over time through compounding and earn dividends. The risk is lower than intraday but still affected by market trends. You'll need to study company reports and growth signs. When comparing delivery vs intraday charges, delivery trading typically has lower costs since you trade less frequently.
For instance, if you think a company will grow well in five years, you can buy its shares now and hold them until they gain value.
Example of Delivery Trade:
Rajani, an investor buys 50 shares of Tata Consultancy Services Ltd. (TCS) at ₹3,578.10 per share and holds them for two years. After this period, if the stock price rises to ₹4,000 per share, she can sell the shares, realizing a total profit of ₹21,095 (50 shares × ₹421.90 gain per share).
|
Aspect |
Intraday Trading |
Delivery Trading |
|---|---|---|
|
Time Horizon |
You must complete all trades within the same trading day. No positions can be held overnight. |
You can hold stocks for days, weeks, months, or even years depending on your investment strategy. |
|
Objective |
Your goal is to capture quick profits from small price movements that occur during the day. |
You aim to build wealth gradually through stock appreciation and dividend income over longer periods. |
|
Risk Level |
You face higher risks due to market volatility and the need to make quick decisions under pressure. |
You experience lower day-to-day risk, though you're still exposed to broader market trends and company performance. |
|
Capital Requirement |
You can trade with less capital as brokers offer leverage (margin), allowing you to control larger positions. |
You need more upfront capital since you must pay the full value of shares at purchase without significant leverage. |
|
Returns |
You can potentially earn faster returns, but losses can also accumulate quickly if trades go wrong. |
Your returns build more slowly but tend to be more stable, including both price appreciation and dividend income. |
|
Transaction Costs |
You pay higher overall costs due to frequent buying and selling, with brokerage fees applying to each transaction. |
Your costs are typically lower since you trade less frequently, though you may pay demat account maintenance charges. |
|
Monitoring Needs |
You must constantly watch the market throughout trading hours and be ready to act immediately. |
You can check your investments periodically—daily, weekly, or even monthly—without constant monitoring. |
|
Skill Requirement |
You need strong technical analysis skills to identify short-term patterns and execute timely trades. |
You rely more on fundamental analysis to evaluate a company's long-term health, management, and growth prospects. |
If you're new to trading, delivery trading is often better for you. The slower pace allows you to learn market movements without the pressure of instant decisions. You can study company fundamentals and industry trends at your speed. This approach shields you from the emotional stress of watching price fluctuations every minute.
Your financial goals matter greatly in this choice. If you need to grow your savings steadily for retirement or large future expenses, delivery trading aligns better with these long-term goals. If you're looking to generate regular income through active trading and have time to dedicate to the market, intraday might suit your needs.
If you have experience reading charts and managing risks, intraday trading might work well for you. It offers chances for quick profits but requires strict discipline and emotional control. Many experienced traders use a combination of both styles, with the majority of capital in delivery positions and a smaller portion for intraday opportunities.
Both intraday trading and delivery trading have their advantages and risks, making them suitable for different types of investors. Intraday trading offers quick returns but demands strong market knowledge and risk management, while delivery trading is better suited for long-term wealth creation with lower short-term volatility. Choosing between the two depends on your financial goals, risk appetite, and trading style. Regardless of the approach, a well-planned strategy and disciplined execution are key to success in the stock market.
Intraday traders don't automatically pay higher fees per trade. Many brokers charge the same flat fee or percentage regardless of how long you hold the stock. However, since intraday traders make many more trades than long-term investors, their total fees often end up higher simply because of the number of transactions.
Yes, delivery trading (holding stocks for longer periods) is typically safer than intraday trading. When you hold stocks longer, you don't have to worry about small price changes that happen during a single day. This gives your investments time to recover from short-term drops, making delivery trading less risky for most people.
Calculate your Net P&L after deducting all the charges like Tax, Brokerage, etc.
Find your required margin.
Calculate the average price you paid for a stock and determine your total cost.
Estimate your investment growth. Calculate potential returns on one-time investments.
Forecast your investment returns. Understand potential growth with regular contributions.
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