Intraday vs Delivery Trading in India: Margin, Charges and Rules

The basic difference

In a delivery trade (product type CNC at most brokers), you pay the full price of the shares and they are credited to your demat account after settlement. You can hold them for a day, a month or years. Your loss is limited to what you paid.

In an intraday trade (product type MIS), you open and close the position on the same trading day. Because the position will not be carried overnight, brokers allow it with margin, a fraction of the full value. If you do not close it yourself, the broker squares it off automatically near the end of the day, usually some time after 3:15 PM.

Intraday also allows short selling of shares: you can sell first and buy back later the same day, profiting if the price falls. In delivery you can only sell shares you already own.

Margin and leverage

Exchange rules set a minimum margin for intraday positions. As a rough illustration, with 20% margin a ₹1,00,000 position blocks about ₹20,000. That leverage is the main attraction of intraday trading and also its main danger.

Leverage does not change how much the stock moves; it changes how much of your capital that move represents. A 2% fall on a ₹1,00,000 position is ₹2,000 whether you paid ₹1,00,000 or ₹20,000. With ₹20,000 blocked, that same ₹2,000 is 10% of the money you put up. Small moves become large results, in both directions.

Charges are different

The Securities Transaction Tax (STT) is charged differently. On delivery trades it applies on both the buy and the sell side at a higher rate; on intraday trades it applies only on the sell side at a lower rate. Stamp duty, exchange transaction charges, SEBI fees and GST apply to both, and many brokers charge different brokerage for each.

Delivery sales may also have a DP (depository) charge per stock sold. For small intraday trades, the fixed parts of the costs can be a large share of a small profit. Always estimate charges before deciding whether a small target is worth it; iTradeChart's brokerage calculator shows the breakdown.

Tax treatment also differs: intraday profits are generally treated as speculative business income, while delivery gains are capital gains taxed according to how long you held. Rules change, so check current rules or ask a tax professional.

Risk and time commitment

Intraday trading needs attention during market hours. Prices can move sharply on news, and with leverage you may need to act within minutes. Positions are closed every day, so there is no overnight gap risk.

Delivery trading usually needs less screen time and lets a trade idea play out over days or weeks. It carries overnight and gap risk, but no forced square-off and no leverage unless you add it separately.

Neither is safer by nature. Intraday risk comes from leverage and speed; delivery risk comes from overnight events and from holding losers too long. What matters most is position size and stop-losses in both.

Settlement and what you actually own

Indian equity markets settle on a T+1 basis: shares bought in delivery reach your demat account the next trading day. Until then they are not yours to transfer, though you can usually sell them (this is often called BTST, buy today sell tomorrow, and carries its own short-delivery risk).

Intraday trades never create holdings. The buy and sell are netted the same day, and only the profit or loss and charges reach your account. That is why intraday positions do not appear in your demat holdings at all.

Which suits whom?

Intraday may suit someone who can watch the market during the day, follows strict rules, keeps position sizes small despite available leverage, and accepts that many days will be flat or slightly negative after charges.

Delivery may suit someone with a job or limited screen time, who prefers to make decisions after market hours and can tolerate overnight moves.

Many learners start with delivery-style swing trades, because slower decisions make it easier to follow a plan, and practise intraday only after they can follow rules consistently.

Futures and options: a third category

F&O positions can also be carried overnight (often called NRML) or taken as intraday (MIS). Margin requirements are higher and depend on the contract. Option buyers pay the full premium; option sellers and futures traders block margin. These products have expiry dates, so the position cannot be held forever.

A worked example: same stock, two styles

Suppose a stock trades at ₹500 and you have ₹1,00,000. As a delivery trade you buy 200 shares for ₹1,00,000 with a stop at ₹470 (risk ₹6,000) and a target at ₹560 a few weeks away. You can check the position once a day after market hours.

As an intraday trade with 20% margin, ₹1,00,000 could control ₹5,00,000 of stock, 1,000 shares. A move from ₹500 to ₹495 would cost ₹5,000, 5% of your capital, in minutes. A sensible intraday trader would not use all of that leverage: risking ₹1,000 with a ₹4 stop means only 250 shares, about ₹1,25,000 of exposure.

Charges also scale with turnover. Ten intraday round trips of ₹1,25,000 each in a week create far more turnover, and so more fees, than one delivery trade held for a month. Compare total charges in your trade history, not just per-trade costs.

Practise both without risk

iTradeChart's paper trading lets you choose Delivery or Intraday on every order, with realistic margin, short selling for intraday, automatic square-off at 3:20 PM, and charges deducted the way a broker would. For futures and options you can choose Carry or Intraday.

Try the same idea both ways for a few weeks and compare in the Report card: number of trades, charges paid, average result and the biggest loss. It is a cheap way to discover which style fits your routine.