Delivery Vs Intraday Trading : Which One Is Right For You? (2024)

Advantages and Disadvantages

Intraday and delivery have both pros and cons of their own. Let us see the advantages of intraday first –

Advantages of Intraday

• Allowed To Buy Shares On Margin

The market makes allows an individual to pay only a part of the full price; thus, a trader can technically gain more by investing less.

• Allowed to Short Sell

If an individual believes that the price of a stock is likely to fall during the day, he may sell the shares without even buying in the first place or holding from previous transactions.

Later, during the day, depending on the profit, the individual can buy the stock at a lower price to book profit. Note that it forms a part of derivatives trading. To know more about this, click here.

• Catch The Price Trends Early

One of the key advantages of intra-day trading is that when there is a price correction or upward trend in prices, you can catch the wave early.

For instance, you purchased a share of company XX in the agri-sector today. And during market hours, Government makes a favourable announcement for the agricultural sector. This could be an increase in MSP, reduction in import duty of raw materials (required for fertilizers or some subsidies for the companies in the industry. Then the stock reacts positively, and the prices surge. Intra-day traders can make quick money by selling the stocks before the prices come back to range-bound.

Disadvantages of Intraday

• Time Frame

Remember, the market can’t be timed, and you can’t predict things irrespective of the tools you use. Thus, if the stock moves in the direction opposite to what you anticipated, you can’t hold the stock for the next day as the position is cut off automatically. Thus, you will have to book losses come what may.

• No Dividend Or Other Benefits Such As Bonus, Rights

In intraday trading, you do not hold the stock as on the record date of the dividend, bonus, rights issue and stock split.

• Required To Be Monitored Closely

An individual is required to track the minute-by-minute market.

Advantages Of Delivery Trading

• Holding Stocks For Long-term

If you believe in the business and fundamentals of a company and believe the company performs well, you can benefit from remaining invested in the stock. Also, if your stock didn’t perform well in the short term for any reason, you don’t need to book a loss if you believe the stock can do well in the long run.

• Safer Than Intraday

The risk in delivery is comparatively lower than intraday, where the profit and loss are booked on the same day.

Disadvantages of Delivery

• Blocking Funds

You need to buy stocks by paying the full amount of each share. Thus, your funds are until you decide to sell your holding.

Which One Should You Go For?

So, this was the key difference between delivery and intraday. According to many market experts, long-term investment gives better rewards than intra-day trading.

Long-term investment or delivery could be a useful investment strategy for those who have less time to review their portfolio on a daily basis.

However, those who are strong in technical analysis and are quick to read chart patterns and have a lot of time to spare can consider intra-day trading.

Whichever choice you make when it comes to the stock market, know your ground, be it fundamentals or technicals. It helps to avoid losses if not make a profit.

Disclaimer: This blog is solely for educational purposes. The securities/investments quoted here are not recommendatory.

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