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8 Powerful Difference Between Intraday and Delivery
One of the biggest concerns for beginners trading in the stock market is the difference between entry and delivery. Both are popular trading methods, but their rules, timeframes, risk levels, confusion levels, and profit-making styles differ. In this blog, we’ll explain in detail the differences between entry and delivery trading, how they work, and which one might be the best option for you.
Whenever someone enters the stock market, they face two options: one is entry trading, in which you buy and sell stocks on the same day. The other is delivery trading, in which you can hold shares for a longer period of time. Both trading styles are profitable in their own way, the only difference lies in their approach and risk management.
Let’s understand the difference between entry and delivery in detail, step by step.
What is intraday trading?
In intraday trading, an investor or trader buys and sells shares within the same trading day. This means that if you buy a share in the morning, you must sell it by evening. Otherwise, your broker will sell the share at the market price that same day.
- Profits are generated from short-term price movements.
- If you make timely decisions, you can make substantial profits in a single day.
- However, if you make the wrong entry or exit, you can incur significant losses. And most people end up losing.
This style is ideal for those who want to study the market full-time.
What is delivery trading?
You can hold it for a month, or even years.
- Delivery has no time restrictions.
- It’s best for long-term investors who want to build wealth in the market with patience.
- Risk is lower because there’s a greater chance that stock prices will appreciate over time.
Delivery trading is suitable for those who prefer long-term investments rather than short-term trading.
Main Difference Between Intraday and Delivery
Now we will examine the difference between intraday and delivery in detail. You will easily understand the points below:
- Time Frame
Intraday: It is compulsory to buy and sell stocks on the same day.
Delivery: You can hold stocks for any number of days—one day, one month, one year, etc.
2. Risk Factor
Intraday: High risk because price fluctuations can cause significant changes in a single day.
Delivery: Relatively low risk because losses can be recovered in the long term. Most stocks tend to rise in the long term.
- Capital Requirement
Intraday: Margin facility is available, allowing you to make large deals even with less money.
Delivery: Shares must be purchased with pure money.
- Ownership of Shares
Intraday: No ownership is gained; you simply trade for the short term.
Delivery: Shares are deposited into your demat account, so ownership is yours.
5 Profit Opportunities
Intraday: Quick profits are possible, but also more risky.
Delivery: Steady, long-term profits are more likely and less risky.
This is the major difference between intraday and delivery that every beginner should understand.
Advantages of Intraday Trading
- Chance to make money quickly.
- You can take advantage of every small market move.
- With the margin facility, you can make big profits with less capital.
Disadvantages of Intraday Trading
- High risk – making the wrong decision can result in significant losses.
- Content monitoring is essential.
- Trading increases your emotional stress.
Advantages of Delivery Trading
- If you’re a long-term investor, this is best for you.
- You get the benefits of dividends and bonuses along with growth.
- The value of the stock also increases over time.
Disadvantages of Delivery Trading
- In this case, all your money is blocked.
- Short-term profits are limited.
- Quick trading opportunities are missed.
Which is best: intraday or delivery?
Every beginner has this question: should they trade intraday or delivery? The answer is simple:
- If you have the time for fast trading, quick decision-making, and market monitoring, intraday trading is best for you. However, it carries a high risk profile. Therefore, approach it with a strategy.
- If you prefer to take less risk and build wealth over the long term, delivery trading is suitable for you.
On the contrary, the choice depends on your goals and risk-taking ability.
Examples of Differences Between Intraday and Delivery
Suppose you bought Infosys shares at Rs 1550.
- Intraday Case: If the stock reaches Rs. 1600 on the same day and you sell it, you will make a profit of Rs. 50 per share. If the price falls to Rs. 1500 and you sell the stock, you will incur a loss of Rs. 50.
- Delivery Case: If you hold the stock for one year and its price reaches Rs. 2000, you will make a profit of Rs. 450 per share.
This example clearly shows the difference between entry and delivery.
FAQs: Difference Between Intraday and Delivery
Q1. What is the biggest difference between intraday and delivery?
Ans: In intraday, you have to buy and sell a stock on the same day. Whereas in delivery, the stock you buy can be held for the long term.
Q2. Does ownership exist in intraday trading?
Ans: The answer is no, ownership is not available in intraday trading. Ownership is only available in delivery trading.
Q3. Is intraday trading better for beginners or delivery?
Ans: Delivery trading is safer for beginners because it involves significantly lower risk.
Q4. Can intraday trading yield greater profits?
Ans: Yes, but it also carries a higher risk, and most people end up losing.
Q5. Does delivery trading yield dividends?
Ans: Yes, you do earn dividends in delivery trading. And along with this, the benefit of bonus and right issue is also available.
Conclusion
Every trader and investor entering the stock market should understand the difference between entry and delivery. Both have their pros and cons. If you’re looking for short-term profits, entry is the right choice, while if you’re looking to build long-term wealth with patience, delivery is the wrong choice.
Before starting trading or investing, it’s crucial to understand your goals, risk appetite, and capital. This will determine whether you should pursue entry or delivery trading.