Buying and selling of shares on daily basis is called day trading. This is also called as Intra day trading. Whatever you buy today you have to sell it today OR whatever you sell today you have to buy it today and very importantly during market hours.
Advantages of Day Trading
a) Margin trading - In Day trading you get margin on your balance amount means you get more leverages (amount) on your available balance amount to do day trading this concept is called margin trading. Margin trading is only possible in day trading and not in delivery trading. How much extra amount (margin) you are going to get that totally depends on your broker, or your online system brokers. Some broker provides 3, 4, 5, and 6 times extra margin. If you do margin then you have to square off your open trades on the same day (means if you bought shares then you have to sell and if you sold shares then you have to buy)before market closes.
b) Second important advantage is that you pay less brokerage (commissions) on day trading (Intraday) as compared to delivery trading. This brokerage again depends from broker to broker (or on your online trading system).
c) In day trading you can sell and then buy this is called short sell which you cant do in delivery trading. You can sell shares when prices are falling and then buy when price falls further.
Disadvantages of Day Trading
a) As you are benefited to get more extra amount to trade (that is margin trading) and get more extra profit it is also equally true that you are also taking more risk of loss.
b) At any cost you have to square off the open transaction before the market closes (especially if you are doing margin trading) at that time the price may not be in your favor.
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