Benefits of Intraday Trading: Quick Profits and Flexibility

Long waiting periods and locked-in capital can make long-term investing feel slow and restrictive. For those who prefer faster decision-making and quicker results, exploring the benefits of intraday trading can be worthwhile. According to SEBI data, the number of individual intraday traders in India grew by nearly 300% between FY2019 and FY2023, showing how short-term trading is gaining popularity.

Read the blog to find out in-depth information on benefits of intraday trading and why intraday trading continues to attract active market participants.

What is Intraday Trading

Intraday trading comprises a systematic process of buying and selling financial instruments, such as stocks, within the same trading day. The primary objective is to capitalise on short-term price fluctuations rather than long-term capital appreciation. Traders using this method must square off their positions before the market session closes, ensuring no assets are held overnight. This approach relies heavily on technical analysis, real-time charts, and market volatility. Consequently, settlement occurs without the physical delivery of shares to the investor’s demat account.

Benefits of Intraday Trading

There are multiple benefits of intraday trading to be aware of. Some of the most important ones include:

1. Quick Profit Potential

Intraday trading allows participants to benefit from price changes that occur within the same trading session. Because all trades are settled before the market closes, any profit or loss is realised immediately, without the need to hold positions overnight. The objective is to identify short-lived price shifts caused by active buying or selling, announcements, or changes in market sentiment during the day.

For example, if a stock opens at ₹420 and rises to ₹428 within the same session, an intraday trader buying 500 shares at the open and selling near the high could capture an ₹8 per-share difference, a total gain of ₹4,000 before costs. Though outcomes vary with timing and execution, this illustrates how small price changes during the day can translate into quick profits when trades are managed efficiently.

2. Leverage and Margin Trading

Intraday trading allows investors to use leverage, enabling them to trade larger positions with a fraction of the capital, increasing profit potential (and risk). Margin trading facilities (MTF) have grown substantially in India:

• As per a recent report, outstanding margin loans used by traders rose 24.4% quarterly to a record ₹84,646 crore by mid-2025, demonstrating the widespread usage of leverage in trading.
• NSE margin rules allow 5x leverage on equity intraday trades, letting traders maximise their capital efficiency.

3. High Liquidity and Market Access

Intraday trading in India largely takes place in stocks listed on the NSE and BSE, which together handle one of the world’s highest trading volumes. According to the National Stock Exchange of India (NSE), the average daily turnover (ADT) in its equity cash segment reached about ₹1.02 lakh crore in March 2024.  Such scale ensures that traders can enter and exit positions swiftly without major price deviation.

Liquidity in the Indian market follows a “U-shaped” intraday pattern highest during the opening and closing hours. This pattern provides better trade execution windows for intraday participants. Furthermore, SEBI’s introduction of systems like co-location and faster order matching has improved market depth, allowing intraday traders access to efficient and high-speed order fulfilment within milliseconds.

4. No Overnight Risk Exposure

Another significant benefit of intraday trading in India is avoiding price movements that occur outside trading hours. Stocks on the NSE and BSE often react to global cues, corporate announcements, or macroeconomic data released after market close. By closing all positions before 3:30 PM, intraday traders eliminate this overnight exposure.

The NSE Investor Report 2023 noted that over 65% of retail equity trades are intraday in nature, one factor being the preference to avoid overnight volatility linked to news or foreign market movements. India’s market structure makes this particularly relevant, as overnight gaps between closing and opening prices can range between 0.5%–1% for actively traded Nifty 50 stocks, according to CRISIL Market Intelligence & Research. By limiting exposure to the trading session only, intraday participants reduce their sensitivity to such gaps and external developments.

5. Flexibility and Control

Intraday trading provides traders with flexibility in choosing strategies and trade sizes throughout the trading session.

• Traders can adopt diverse approaches, such as scalping, momentum trading, or technical analysis-based strategies, adjusting position sizes and stop-loss levels as market conditions evolve.
• The real-time nature of intraday trading facilitates active decision-making and route corrections based on price action during the day. This appeals especially to younger traders and those who prefer an engaged trading style.

6. Opportunities for Learning and Growth

Active intraday trading fosters skill development by providing quick feedback loops on decisions, accelerating understanding of market mechanics, price patterns, and risk management. Traders refine their technical analysis and discipline as they handle rapid price moves.

• However, SEBI data indicates about 70% of individual intraday traders incurred losses in FY 2022-23, underscoring the importance of education, sound strategy, and risk management for long-term success.
• Through daily exposure to markets and technical tools, traders can progressively improve their market reading and execution skills.

7. Lower Transaction Costs

Intraday trading typically involves lower transaction costs compared to delivery trades. Brokerage fees usually range between 0.01% and 0.05% per trade, though this varies by broker. Additionally, Securities Transaction Tax (STT) on intraday equity trades is lower, charged only on the sell side at 0.025%, compared to 0.1% on delivery trades for both buy and sell legs. 

These cost efficiencies allow traders to capitalise on small intra-day price fluctuations without excessive fee erosion, improving profitability.

8. Tax Benefits in Some Regions

As per the Finance Act 2025 provisions, intraday trading income in India continues to be treated as speculative income under Income Tax Act, 1961, allowing traders to deduct trading-related expenses such as brokerage, internet costs, and research tools under “income from business or profession.” This differs from capital gains taxation applied to long-term or short-term delivery investments.

Further, intraday traders registered as individuals or small proprietors can claim presumptive taxation benefits under Section 44AD if their turnover remains below ₹2 crore, simplifying compliance. Intraday losses can be set off only against similar income and carried forward for up to 8 years, requiring regular tax filings.

Conclusion 

Intraday trading offers a distinct alternative to long-term investing by focusing on daily market movements. It allows for quick outcomes without the need to hold assets overnight. To fully utilise the benefits of intraday trading, participants must understand market trends and act decisively. Ultimately, this method suits those looking for an active role in the financial markets, provided they maintain strict discipline and risk control.

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