The Pros and Cons of Intraday Trading

The Pros and Cons of Intraday Trading – Gill Broking


Intraday trading is exactly what the name suggests – buying and selling the stocks on a regular basis. Volatility is the main factor that helps intraday traders earn profits from this market. While volatility can grow your profits significantly, it also involves a huge risk of losing money due to the changes in the price movements.

It is, therefore, important to learn both the pros and cons of intraday trading to get a better idea of how this market works and how exactly you can grow your money. In this post, we will walk you through a few advantages and disadvantages of intraday trading. So, keep reading to learn more to know The Pros and Cons of Intraday Trading.

The Pros of Intraday Trading

Buy Low and Sell High

Volatility in the share market provides intraday traders with an opportunity to buy shares at a low price and sell them at a high price. You can leverage the market movements to generate significant profits from your investment.

The economic and political factors can have a profound impact on the stock price of the company, which can lead to price movements. It gives traders an opportunity to learn the market patterns and follow the current trends to earn decent profits from their investment within hours.

No Waiting Period

Unlike the long-term investment instruments, intraday traders do not have to carry the overnight risks. The stocks are purchased and sold the same day, in fact within hours. There is no waiting period involved in the investment, meaning you can withdraw the money whenever you want.

Every day brings a fresh start for you and gives you an opportunity to start afresh forgetting all the events that took place in the past. Now that you have withdrawn your capital from the investment market at the closing time, you don’t have to bear the risk of any sudden price movements.

It can be a Full-Time Employment Opportunity

Making huge profits in a small amount of time is quite encouraging for the audience. That’s one of the reasons why people find intraday trading quite motivating. They are willing to take it as a full-time employment opportunity. You can be your own boss and make significant profits from small investments. Not only does it help you financially, but it provides you with an excellent opportunity to meet your day-to-day financial goals. Many intraday traders started trading as a part-time money-making task but became full-time traders.

Minimal Research Required

The fundamental analysis of the stock market is required for long-term investors. Those who trade on a regular basis can research the basics of the company and buy the shares that seem volatile and profitable. You do not have to spend hours researching the company, its goals, financial position, and other details. Through thorough research is highly recommended, it isn’t a necessity.

The Cons of Intraday Trading

No Fixed Amount

The major disadvantage of intraday trading is that it doesn’t guarantee a fixed income. There is a chance you might end up paying from your pocket and never recover the losses from this investment. Sure, no investment guarantee fixed returns, but intraday trading comes with a very high volatility rate. So, there is always a chance you might lose more than expected.

It Carries a High Risk

As you don’t get enough time to research the market and make sound decisions, the risks involved in intraday trading are quite high. The investors make an investment in the market without analyzing it properly.

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It is, therefore, important to learn both the pros and cons of intraday trading to get a better idea of how this market works and how exactly you can grow your money. In this post, we will walk you through a few advantages and disadvantages of intraday trading. So, keep reading to learn more.

• Beware of fixed/guaranteed/regular returns/ capital protection schemes. Brokers or their authorized persons or any of their associates are not authorized to offer fixed/guaranteed/regular returns/ capital protection on your investment or authorized to enter into any loan agreement with you to pay interest on the funds offered by you. Please note that in case of default of a member claim for funds or securities given to the broker under any arrangement/ agreement of indicative return will not be accepted by the relevant Committee of the Exchange as per the approved norms.
• Ensure that pay-out of funds/securities is received in your account within 1 working day from the date of pay-out.
• Be careful while executing the PoA (Power of Attorney) – specify all the rights that the stock broker can exercise and timeframe for which PoA is valid. It may be noted that PoA is not a mandatory requirement as per SEBI / Exchanges.
• Register for online applications viz Speed-e and Easiest provided by Depositories for online delivery of securities as an alternative to PoA.

• Do not keep funds idle with the Stock Broker. Please note that your stock broker has to return the credit balance lying with them, within three working days in case you have not done any transaction within last 30 calendar days. Please note that in case of default of a Member, claim for funds and securities, without any transaction on the exchange will not be accepted by the relevant Committee of the Exchange as per the approved norms.

• Check the frequency of accounts settlement opted for. If you have opted for running account, please ensure that your broker settles your account and, in any case, not later than once in 90 days (or 30 days if you have opted for 30 days settlement). In case of declaration of trading member as defaulter, the claims of clients against such defaulter member would be subject to norms for eligibility of claims for compensation from IPF to the clients of the defaulter member. These norms are available on Exchange website at following link: NSE, MCX

• Brokers are not permitted to accept transfer of securities as margin. Securities offered as margin/ collateral MUST remain in the account of the client and can be pledged to the broker only by way of ‘margin pledge’, created in the Depository system. Clients are not permitted to place any securities with the broker or associate of the broker or authorized person of the broker for any reason. Broker can take securities belonging to clients only for settlement of securities sold by the client.

• Always keep your contact details viz. Mobile number/Email ID updated with the stock broker. Email and mobile number is mandatory and you must provide the same to your broker for updation in Exchange records. You must immediately take up the matter with Stock Broker/Exchange if you are not receiving the messages from Exchange/Depositories regularly.

• Don’t ignore any emails/SMSs received from the Exchange for trades done by you. Verify the same with the Contract notes/Statement of accounts received from your broker and report discrepancy, if any, to your broker in writing immediately and if the Stock Broker does not respond, please take this up with the Exchange/Depositories forthwith.

• Check messages sent by Exchanges on a weekly basis regarding funds and securities balances reported by the trading member, compare it with the weekly statement of account sent by broker and immediately raise a concern to the exchange if you notice a discrepancy.

• Please do not transfer funds, for the purposes of trading to anyone, including an authorized person or an associate of the broker, other than a SEBI registered Stock broker.

• Do not deal with unregistered intermediaries (who are not registered with SEBI/Exchanges).

Names and contact details of all Key Managerial Personnel including Compliance Officer

Sr. No.Name of the IndividualDesignationContact NumbersEmail Id
1 Charanpreet GillCEO/
2 Charanpreet GillWhole Time
3 Charanpreet GillCompliance
4Manpriya GillDesignated
5Kewal GillDesignated

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