How is intraday trading different from delivery trading?

Intraday trading and delivery trading are two distinct approaches in the stock market, each with its own characteristics and objectives. Here’s a breakdown of their key differences:

Intraday Trading:

• Time Horizon: Intraday trades are executed and closed within the same trading day. The goal is to capitalise on short-term price fluctuations and exit all positions before the market closes.
• Objective: Intraday traders aim to take advantage of intraday market trends and volatility.
• Risk Level: Intraday trading is considered riskier due to the short time frames involved and the potential for rapid price swings.
• Capital Requirement: Intraday trading often requires less capital upfront due to the availability of leverage, which allows traders to control larger positions with a smaller investment.
• Analysis: Intraday traders typically rely on technical analysis, using charts and indicators to identify short-term trading opportunities.

Delivery Trading:

• Time Horizon: Delivery trades involve buying stocks with the intention of holding them for a longer period, typically more than one day. The focus is on long-term investment.
• Objective: Delivery traders aim to benefit from the long-term growth of a company and may also seek dividends or other benefits associated with stock ownership.
• Risk Level: Delivery trading is generally considered less risky than intraday trading, as it focuses on long-term trends and fundamental analysis.
• Capital Requirement: Delivery trading usually requires a larger capital outlay, as traders need to pay the full price for the shares they purchase.
• Analysis: Delivery traders typically use fundamental analysis, examining a company’s financial statements, management, and industry to assess its long-term potential.

Here’s a table summarising the key differences: