InvestorQ : What exactly is intraday trading and how does it work?
Priyanka Jain made post

What exactly is intraday trading and how does it work?

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Riya Dwivedi answered.
3 years ago
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As the name suggests, in intraday trading, you buy and sell on the same day. For example, if you bought 100 shares of Reliance Industries in the morning then you have the option of closing out your position end of the day. Yes, the same day only. If it goes beyond that then it is not intraday trade. Then it becomes a delivery trade and you have to pay the full money. So be careful here. You have to close the position on the same day itself. Actually, intraday trading works both ways. In our above example, say you bought 100 shares of RIL at Rs.1150. Around lunchtime, before you move out you check that the price has gone up to Rs.1170. What can you do? You can just sell 100 shares of Reliance at Rs.1170 and book profit of Rs.2000 (20x100) on your trade. This is intraday trade because you bought and sold on the same day.
You can also work it the other way. For example, if you expect a stock to go down due to bad news then what can you do? You can sell the stock. It is like you sell 200 shares of Tata Motors at Rs.271. Then when the price falls to Rs.265, you cover your position by buying back the 200 shares at Rs.265. That means you make Rs.1200 (200x6) as profit on the trade. This is short selling and has to be closed on the same day itself.
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