You can buy shares as Intraday, and when you do so, you must have to sell that in the same day. But if this is the condition, then why would we buy shares which we must have to sell in the same day, why not buy and hold it for few days and sell later when profit is confirmed.
The answer is :-
The answer is :-
- In Intraday, we can, not just buy first and sell later, but also we can sell first and buy later. So we can make profit in both directions.
- In Intraday, even though we have less money in our account, we can do a trade of much higher value (1 to 50 times more then our funds).
- YesBank is now at Rs.68, and we think that it would go up in the next few minutes. Lets say we have Rs. 1L in our account, so we can buy roughly 1500 shares. Lets say it went Rs. 1 up after few minutes, and you sell your shares, so you made Rs 1500. But for doing this you don't even need to do this trade as Intraday. In Intraday, for the same situation you can get much margin and you can buy 15 times more (based on brokers) share then your available funds, so in our case you can buy around 22k shares, hence your profit would be 22k (shares) x Rs1 (profit) = Rs 22,000.
- Lets say in the same above case you predicted that YesBank may fall from 68, So instead of buying, you will sell 22k shares at 68 (yes in Intraday this is perfectly legal, you can buy or sell first but in the same day you must have to close that position by doing the reverse). Then lets say it went Rs 1 down, at that time you close your position by buying 22k shares. Hence your profit will be total sell price - total buy price, which is 22,000.