day trading benefits

Intraday Trading Meaning: 5 Benefits of Intraday Trading in India

Stocks (Equity)

Trading is an extensive domain and the key to successfully establish your trading venture is through constant efforts and persistence. Trading is an enterprise for well-researched investors who believe in the inherent quality of credible information and know-how to make informed decisions.

In Indian markets, as elsewhere, the options of trading decisions have undergone a sea change with the advent and diffusion of technology and the arising market dynamics thereafter. One such option is the intraday trading that has emerged as a viable option owing to its numerous benefits.

Intraday Trading Meaning

Intraday trading or high-frequency trading during the specified period of one day until the close of trading hours, is a form of quick trading that has gained much ground in the recent past.

intraday trading

Intraday trading goes beyond the traditional approaches of the long-term trading psyche and addresses a fast-paced set up wherein high volumes of quick trading transactions are carried out, one day at a time.

As is known, intraday trading does not offer any overnight ownership of stock deals as the deals are closed by the end of the day. Therefore, the ownership retention period is less than a day and hence, correspondingly the trade volume is much higher than that of conventional trading.

Benefits of Intraday Trading

Here are five major benefits of day trading that make it a worthwhile option:

1. No hassles about next day performance of stock:

By its very nature, intraday trading capitalizes on day time position and performance of the stock options. There is no question of overnight ownership or retention of the stock and hence, there is no need of worrying about the performance of the stock deal or stock position the next day.

Although this may seem quite fast-paced and abrupt in terms of traditional options, yet this is exactly what gives investment security to day traders. The deal is made, the stock is evaluated and the bid is carried through immediately.

This provides a cushion against any untoward losses or dips in stock performance in the long run.

2. Independent of market performance:

What the market scenario is and how is a stock performing due to market fluctuations is a general cause of worry to many traders. Market price projections may vary and in case of any general slump, the fund corpus suffers greatly.

Many traders have had to sell their stocks due to rapid slump or dip in stock pricing situations in the market. This is why day intraday trading is a credible and safe option in such cases. Irrespective of the market situation, the daytime performance of a stock is evaluated and therefore, the gain margin of a stock is independent of the general slump in the market if any. This makes intraday trading one of the safest trading options.

3. No need for an in-depth analysis or detailed research:

Of course, trading decisions have to be based on data analysis and research but for intraday trading, this research does not have to be extensive or too detailed. Understanding the current situation of the stock market and the daytime price projections often suffice for intraday trading.

4. Replication of profit margins through gains:

In intraday trading, a margin from the earned profits can be kept aside for utilization in the trade market, depending on the price fluctuations of that particular stock.

This means that you can use your gained profits as marginal funds for further investment on a short and quick-term basis. This increases the chances of profit retention.

Besides, many brokerage firms offer credit facilities under certain terms for intraday trading. The fast and high-frequency nature of intraday trading, therefore, works in its favour.

5. Benefits from market volatility:

This is another major benefit of intraday trading. Due to its very nature, intraday trading makes the traders the first-hand receptors of any sudden or immediate market price or stock fluctuation.

In case of any major occurrence of sudden consequences, those engaged in intraday trading generally gauge the trends before the rest. This allows them to benefit from sudden and unexpected market volatility.