Intraday trading involves buying and selling securities within the same trading day, with positions being squared off before the market closes. On the other hand, delivery trading, also known as cash trading, involves buying securities to hold them for more than one trading day.
What are the benefits of intraday and delivery?
Intraday trading offers the potential for quick profits as traders aim to capitalise on short-term price movements. It also allows for leveraged trading, wherein traders can trade larger positions with a smaller amount of capital through margin trading. Delivery trading, on the other hand, is suited for investors seeking long-term appreciation and dividend income from their investments. It provides the opportunity to participate in a company's growth over time and benefit from dividend payouts.
What is the difference between intraday and delivery trade?
The primary difference between intraday and delivery trading lies in the holding period of the securities. In intraday trading, positions are opened and closed within the same trading session, typically within minutes or hours. Traders aim to profit from small price fluctuations and do not hold positions overnight to avoid overnight risks such as gap-up or gap-down openings. In contrast, delivery trading involves holding securities beyond the trading day, with investors focusing on the fundamentals of the company and its long-term growth prospects. Delivery trading requires a longer-term investment horizon and is often associated with less frequent trading activity compared to intraday trading. Additionally, while intraday trading may offer the potential for quick gains, it also carries higher risks due to the volatile nature of short-term price movements and the use of leverage. On the other hand, delivery trading is considered more conservative and suitable for investors with lower risk tolerance and a focus on wealth creation over the long term.
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