Intraday trading means buying and selling shares within the same trading day, before the market closes at 3:30 PM. You do not hold the position overnight. Every trade you open must be closed by the end of the session.
This is fundamentally different from investing, where you buy shares and hold them for months or years. Intraday trading is an active strategy where your profit or loss on each trade is realised the same day.
This guide explains how intraday trading works in India, what it costs, what the real risks are, and the basic mechanics a beginner needs to understand before placing their first intraday trade.
Key Takeaways
• Intraday trading on NSE and BSE requires a demat account and a trading account. You can trade stocks in the cash segment or derivatives (futures and options) in the F&O segment.
• Profits and losses are realised the same day. Any position you do not close before 3:20 PM is automatically squared off by your broker, usually at a penalty charge.
• SEBI’s study of 1 crore individual F&O traders between FY22 and FY24 found that 9 out of 10 lost money. Aggregate retail losses in F&O reached Rs. 1.81 lakh crore over three years.
• Intraday trading in the cash equity segment (buying and selling stocks same day) carries different risk than F&O. For beginners, cash intraday is simpler to understand and has defined loss limited to the amount deployed.
• Brokerage, STT, exchange charges, and GST apply to every intraday trade. These transaction costs mean your position must move enough in your favour to cover costs before you make any net profit.
What Exactly Is Intraday Trading?
When you place a normal delivery trade on NSE or BSE, you buy shares and they are credited to your demat account after T+1 settlement. You own them. You can hold them as long as you want.
An intraday trade is different. When you select ‘Intraday’ or ‘MIS’ (Margin Intraday Square-Off) in your broker’s trading platform, you are telling the system that this position must be closed the same day. If you buy 100 shares of a company at Rs. 200 as an intraday position, you must sell those 100 shares before the market closes. If you do not, your broker will automatically close (square off) the position, typically around 3:20 PM, regardless of the current price.
The profit or loss on the trade is the difference between your buy price and your sell price, multiplied by the number of shares, minus all applicable transaction costs.
| Example: You buy 100 shares at Rs. 200 (total: Rs. 20,000). The price rises to Rs. 208 and you sell. Gross profit: Rs. 800. After brokerage, STT, exchange charges, and GST (approximately Rs. 150 to Rs. 200 total depending on your broker), net profit: approximately Rs. 600 to Rs. 650. If the price had fallen to Rs. 193 and you sold, gross loss: Rs. 700. After transaction costs, total outflow: approximately Rs. 850 to Rs. 900. |
Intraday Trading vs Investing: The Key Differences
| Factor | Intraday Trading | Long-Term Investing |
| Holding period | Same day only. Position must close before 3:30 PM. | Days to years. No time constraint. |
| Profit mechanism | Profit from short-term price movements within the day. | Profit from company growth, dividends, and long-term price appreciation. |
| Capital required | Brokers offer intraday margin (leverage). Less capital needed per position. | Full purchase price for delivery. Exactly what you buy. |
| Risk per trade | Defined by your position size and where you exit. | Defined by the company’s long-term performance. |
| Time commitment | Active monitoring required during market hours. | Can be done with monthly reviews. |
| Transaction costs | Pay brokerage, STT, exchange fees on every trade. | Pay once on purchase, once on sale. Fewer total transactions. |
| Tax treatment | STCG at 20% (held under 12 months). Speculative business income for F&O. | LTCG at 12.5% above Rs. 1.25 lakh (held over 12 months). |
| Skill required | Technical analysis, discipline, fast decision-making. | Business analysis, patience, emotional discipline over long periods. |
How Intraday Trading Works on NSE and BSE
The trading session
The regular trading session on NSE and BSE runs from 9:15 AM to 3:30 PM, Monday to Friday, on non-holiday trading days. The pre-open session runs from 9:00 to 9:15 AM. Intraday positions must be opened after 9:15 AM and closed before 3:30 PM.
Most brokers set their auto square-off time for intraday positions at 3:20 PM to provide a 10-minute buffer. If you have not closed your intraday position by then, the broker’s system automatically sells your buy positions and buys back your sell positions at the current market price. A penalty charge (typically Rs. 50 per order or 0.05% of the position value, depending on the broker) may apply for auto square-off.
Margin in intraday trading
For intraday trades in the cash equity segment, SEBI allows brokers to offer leverage: you can take a position larger than your available cash by using margin. For example, if a broker offers 5x intraday margin on a stock, you can take a Rs. 50,000 position with Rs. 10,000 of your own capital.
Leverage amplifies both profits and losses. If the position moves 2% in your favour, you gain 10% on your deployed capital. If it moves 2% against you, you lose 10% of your deployed capital. The margin mechanics make intraday trading riskier than it appears when you only look at the percentage price movement.
SEBI has tightened intraday margin rules significantly since 2020. Peak margin reporting requirements mean brokers must now have real-time margin from clients. The era of very high intraday leverage (10x, 15x, 20x) offered by some brokers has been substantially curtailed by SEBI regulation.
Order types for intraday traders
Four order types are most relevant for intraday trading:
- Market order: executes immediately at the best available price. Fast, but the execution price may differ from what you saw on screen, especially in fast-moving stocks.
- Limit order: executes only at your specified price or better. You control the entry price but the order may not execute if the market does not reach your level.
- Stop-loss order: automatically triggers a sell order (for a long position) when the price reaches a specified lower level. Essential for limiting losses on intraday trades.
- Stop-loss market (SLM) order: triggers a market order when the stop-loss price is hit. Faster execution than a stop-loss limit order but subject to slippage in fast markets.
The Real Costs of Each Intraday Trade
Transaction costs are the most underestimated factor for beginner intraday traders. Every trade has multiple cost components, and these costs apply whether the trade is profitable or not.
| Cost Component | Rate (Cash Equity Intraday) | On Rs. 20,000 Position |
| Brokerage | Flat Rs. 20 per order (discount brokers) or 0.03% (some full-service brokers) | Rs. 20 per leg (buy + sell = Rs. 40) for flat-fee brokers |
| Securities Transaction Tax (STT) | 0.025% on the sell side only for intraday | Rs. 5 (on the sell leg of Rs. 20,000) |
| Exchange Transaction Charges (NSE) | 0.00297% of turnover | Approximately Rs. 1.19 on Rs. 40,000 total turnover (buy + sell) |
| SEBI Turnover Fees | 0.0001% of turnover | Negligible (under Rs. 0.05) |
| Stamp Duty | 0.003% on buy side only | Rs. 0.60 |
| GST on brokerage and exchange charges | 18% of (brokerage + exchange charges) | Approximately Rs. 7 to Rs. 10 |
| Total approximate cost | Varies by broker | Rs. 55 to Rs. 70 per round trip (buy + sell) on a Rs. 20,000 position |
On a Rs. 20,000 intraday position, your total transaction cost for one round trip (one buy and one sell) is approximately Rs. 55 to Rs. 70 with a discount broker. This means the stock must move at least 0.28% in your favour just to break even. On multiple trades in a day, these costs accumulate.
Active intraday traders who do 5 to 10 trades per day can pay Rs. 500 to Rs. 700 in daily transaction costs. Over a month of 22 trading days, that is Rs. 11,000 to Rs. 15,000 in transaction costs alone, before accounting for trade losses. This is why many active intraday traders lose money even when they win more trades than they lose, if their average loss is larger than their average win.
The Honest Risk Picture
This section is the most important in the post. Before learning strategies and indicators, a beginner needs an accurate picture of intraday trading risk.
SEBI’s findings on retail trading losses
In January 2024, SEBI published a study covering 1 crore individual traders in the equity F&O segment between FY22 and FY24. The findings:
- 9 out of 10 individual F&O traders (93%) lost money over the 3-year period.
- Total retail F&O losses aggregated to Rs. 1.81 lakh crore over three years.
- The average loss per individual trader was Rs. 1.20 lakh over the period.
- Only 7.2% of individual F&O traders were profitable in each year. Of those, more than half had net losses after transaction costs.
These figures are for F&O (futures and options), which is a more complex form of intraday/short-term trading. Cash intraday equity trading in the stock market carries different risk characteristics, but the fundamental challenge of consistently predicting short-term price movements applies to both.
Why most beginners lose money intraday
- Overtrading: placing too many trades trying to recover losses. Each trade adds cost and risk.
- No stop-loss discipline: holding a losing intraday position hoping it will recover, which converts a small loss into a large one when the auto square-off hits at 3:20 PM.
- Chasing momentum: entering a trade after a stock has already moved significantly, buying high on the assumption the trend continues.
- Ignoring transaction costs: not accounting for brokerage and STT when calculating the minimum move needed to make a trade profitable.
- Using too much margin: amplifying positions beyond what their knowledge and capital can absorb.
- Acting on tips: trading based on social media calls or WhatsApp messages from unverified sources rather than their own analysis.
The SEBI data is not intended to discourage all intraday trading. It is intended to ensure you start with realistic expectations. Profitable intraday trading exists, but it requires significant skill development, discipline, and typically a long learning period. It is not a shortcut to income.
What You Need to Start Intraday Trading in India
Accounts required
- Demat account: holds your shares in electronic form. Required for delivery trades. Also needed as the base for your trading account.
- Trading account: the platform through which you place buy and sell orders on NSE and BSE. Usually provided by your broker alongside the demat account.
- Bank account: linked to your trading account for funds transfer. The same bank account must be linked throughout.
Choosing a broker for intraday trading
Two main broker types in India:
- Discount brokers (Zerodha, Groww, Angel One, 5paisa, Fyers): flat brokerage per order (typically Rs. 20), fast execution platforms, good for active traders who generate their own analysis.
- Full-service brokers (Motilal Oswal, ICICI Direct, HDFC Securities, Kotak Securities): percentage-based brokerage, research reports, relationship manager support. More expensive per trade but provide more handholding.
For a pure beginner doing small-volume intraday trades, discount brokers are cost-effective. For a beginner who wants research support alongside trading, a full-service broker may be worth the higher brokerage.
Starting capital
There is no regulatory minimum for intraday trading. You can technically start with Rs. 5,000. But the realistic minimum to trade meaningfully (taking positions large enough to generate material learning and income once skill develops) is generally Rs. 50,000 to Rs. 1,00,000.
Start with capital you can afford to lose entirely. Treat the initial period as the cost of education. Do not trade with borrowed money, money earmarked for rent, or emergency funds.
The Basics of Stock Selection for Intraday
Not all stocks are suitable for intraday trading. The key characteristics to look for:
- High liquidity: a stock must have enough buyers and sellers so you can enter and exit without your own order moving the price significantly. Nifty 50 stocks and most Nifty 100 stocks have the liquidity required. Illiquid small caps do not.
- High average daily volume: look for stocks with average daily traded volume above 5 lakh shares. Low-volume stocks have wide bid-ask spreads that increase your effective cost.
- Availability in F&O segment: stocks with active futures and options contracts generally have tighter bid-ask spreads and more participants, which makes intraday trading in the cash segment cleaner.
- News catalyst or range-bound behaviour: intraday opportunities arise either when a stock is moving with a clear catalyst (earnings, corporate announcement) or when it is range-bound and predictably oscillating between support and resistance levels.
As a beginner, restrict your intraday trading to the top 20 to 30 Nifty 50 stocks by daily trading volume. These provide the liquidity, transparency, and predictability that complex or illiquid stocks do not.
Basic Concepts Every Intraday Beginner Should Learn
Support and resistance
Support is a price level where a stock has historically found buying interest and stopped falling. Resistance is a price level where it has historically found selling pressure and stopped rising. Intraday traders use these levels to plan entry and exit points: buying near support, selling near resistance, and placing stop-losses below support for a long position.
Volume analysis
Price movement accompanied by high volume is more reliable than price movement on low volume. If a stock breaks above a resistance level on high volume, the breakout is more likely to continue. A breakout on low volume may reverse quickly. Always check volume alongside price when evaluating an intraday setup.
Risk-reward ratio
Before entering any intraday trade, define your target price (where you will exit if the trade works) and your stop-loss price (where you will exit if the trade does not work). Calculate the risk-reward ratio: if your target is Rs. 10 above your entry and your stop-loss is Rs. 4 below, your risk-reward is 1:2.5. A trade with a risk-reward below 1:2 is generally not worth taking, because even a 50% win rate will not produce net profit after costs.
Position sizing
Position sizing is deciding how much capital to deploy in a single trade. A common starting rule: never risk more than 1 to 2% of your total trading capital on any single intraday trade. If your trading capital is Rs. 1,00,000, your maximum loss per trade should be Rs. 1,000 to Rs. 2,000. This ensures that a string of losses does not wipe out your capital before you have the chance to learn and improve.
Fortune Wealth is a SEBI-registered investment firm. We provide access to equity markets and help investors understand products like MTF and intraday margin trading through our platform.
Frequently Asked Questions
What is intraday trading and how does it work in India?
Intraday trading means buying and selling shares within the same trading day on NSE or BSE before the market closes at 3:30 PM. You select ‘Intraday’ or ‘MIS’ when placing your order. The position must be closed the same day. If you do not close it yourself, your broker automatically squares it off around 3:20 PM. Your profit or loss is the difference between your buy price and sell price, multiplied by the number of shares, minus transaction costs (brokerage, STT, exchange charges, GST).
How much money do I need to start intraday trading in India?
There is no regulatory minimum for intraday trading. But practically, Rs. 50,000 to Rs. 1,00,000 is a reasonable starting amount for a beginner who wants to take meaningful positions and learn properly. Below Rs. 50,000, the capital is too small for most liquid stocks to deploy effectively, and the position sizes that result from small capital make it difficult to practice real discipline. Start with money you can afford to lose entirely. Do not trade with borrowed money or emergency funds.
What is the difference between intraday trading and delivery trading?
In delivery trading, you buy shares and they are credited to your demat account after T+1 settlement. You own them and can hold them indefinitely. In intraday trading, you open and close the position the same day. No shares are delivered to your demat account. You do not actually own the shares. You are trading the price movement within the day. Intraday positions also require less capital upfront because brokers offer intraday margin (leverage), but leverage amplifies both gains and losses.
Is intraday trading profitable for beginners in India?
The data says most beginners lose money. SEBI’s January 2024 study found that 9 out of 10 individual F&O traders lost money over FY22 to FY24, with aggregate losses of Rs. 1.81 lakh crore. Cash intraday equity trading is different from F&O but shares the fundamental challenge: consistently predicting short-term price movements is extremely difficult. Most beginners lose money in the early period. Profitable intraday trading is possible but requires significant skill development, discipline, and a realistic approach to the learning curve.
What is the auto square-off time for intraday trades in India?
Most brokers in India automatically square off (close) intraday positions around 3:20 PM, 10 minutes before the market closes at 3:30 PM. The exact time varies by broker: some do it at 3:15 PM, others at 3:20 PM. If your position is auto squared off, the broker may charge a penalty of Rs. 50 per order or 0.05% of the position value depending on the broker’s policy. Always check your broker’s specific auto square-off time and penalty before trading.
What stocks should beginners trade intraday in India?
Beginners should restrict intraday trading to high-liquidity Nifty 50 stocks with high daily trading volumes. These stocks have tight bid-ask spreads, abundant buyers and sellers at most price levels, and predictable price behaviour relative to the broader market. Avoid illiquid small caps, recently listed companies, and stocks under regulatory surveillance. As a rule of thumb: if the stock is not in the Nifty 100 and does not have at least 5 lakh shares traded daily, it is not suitable for intraday trading as a beginner.
What are the tax implications of intraday trading in India?
Intraday equity trading (cash segment, same-day buy and sell) is classified as speculative business income under the Income Tax Act. It is taxed at your applicable income tax slab rate (up to 30% plus surcharge). It is not eligible for the concessional STCG rate of 20% that applies to delivery equity trades held less than 12 months. Speculative business losses from intraday trading can only be set off against speculative business gains, not against other income. F&O trading income is classified as non-speculative business income and has different set-off rules. Consult a CA for your specific tax situation.
What is the difference between intraday trading in the cash segment vs F&O?
Cash intraday trading means buying and selling actual shares on the same day. Your maximum loss is limited to the amount you deployed (your position size times the price fall). F&O (futures and options) trading involves derivative contracts. Futures can result in losses beyond your initial margin if the position moves significantly against you and your margin is not topped up. Options can expire worthless. F&O requires a separate segment activation on your trading account, is more complex than cash intraday, and the SEBI loss data (Rs. 1.81 lakh crore over FY22-24) relates primarily to F&O. For beginners, cash intraday is simpler and has more defined risk.
| Topic | URL and Anchor Text |
| What Is Intraday Trading | intraday trading explained |
| Intraday Trading Tips and Strategies | tips and strategies for intraday trading |
| Stocks and Equity | explore equity investment in Mumbai |
