SHARETIPSINFO >>Articles Directory >>Intraday trading or delivery based investment make your investments wisely to gain
While doing stock market investment you can trade in two different ways. You can either do intraday trading or can opt for delivery based investment. Intraday trading is typically completed within a day that means you have sell the stocks that you have purchased that day before the closing of the exchange. Even if you do not sell the stocks by yourself, they will automatically square off before the closing of the exchange. In case of delivery based investment or long term investment, you can sell the stocks as and when you wish to sell or buy them. Both these types of stock trading has its pros and cons.
Advantages Of Day Trading –
In day trading you can buy stocks without paying for the full price of the stocks. The market makers allow you pay only a part of the price to hold the shares. So, you can gain more by investing less.
In day trading you can always short sell the stocks that mean you can always sell the stocks before buying them and then buy the stocks before the closing of the market. This is one benefit that can give you profit even when the price of the stock is sure to fall.
The brokerage of the intraday trading is always lower than the delivery trading.
In day trading you are getting the profit on the very day. So, you investment is for a few hours only. Therefore, even if the stock price rises, a little your profit percentage is significant.
You get back the money each day after the market closes and hence you can always start afresh the next morning.
Disadvantages Of Intraday Trading
The biggest disadvantage of intraday trading is the time frame. You have to sell the stocks within a day. So, if the stock loses price you are sure to loose money.
Advantages Of Delivery Based Trading
With delivery based trading, you can always hold a stock till it reaches the expected price.
The long term investment can always get you dividend.
You can also benefit from split shares, bonus stocks and other benefits that the company announces.
Disadvantage Of Delivery Based Trading
In delivery trading you pay higher brokerage.
Your investment is always susceptible to market crashes, business cycles and other factors.
Whatever it is, as an investor, you should know which stock is for intraday trading and which one is to hold as long term investment.
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