InvestorQ : How and why is the intraday trading totally different from normal delivery
Priyanka Jain made post

How and why is the intraday trading totally different from normal delivery

Riya Dwivedi answered.
3 years ago
Intraday trading is done purely with the intent of closing out the trade on the same day and booking the profits and losses also on the same day. Intraday trading differs from delivery trading in 3 ways:
There is no involvement of the demat account in any way in intraday trading. Everything is cash settled with only profits and losses of net positions considered. When you buy shares for delivery you need funds and when you sell shares in delivery you need shares in your demat account. In intraday trading, you don’t need either. You just need to pay margin and can take long or short positions for intraday.
While delivery trades depend on an analysis of fundamentals and technicals of a stock, intraday is more about technical charts and news flows. It is a just too short term to consider any long-term indicators. The focus is entirely on the very short-term momentum of stock prices. An intraday trading process is more about staying on the right side of momentum. Don’t every try to outsmart the market under any circumstances.
There is also a difference in the taxation of the two types of trading. In terms of taxation of profits, delivery trades are treated as normal business income or as capital gains. However, intraday trade being done without the intent of taking delivery is treated as speculative income for tax purposes. Speculative losses on intraday trading can only be set off against speculative profits. They cannot be set off against short-term capital gains or against long-term capital gains.