Difference Between Intraday and Delivery Trading Explained – Lares Algotech

Introduction

The Indian stock market offers multiple avenues for investors and traders to participate, but two of the most common styles are Intraday and Delivery Trading. For beginners, these terms can be confusing, and choosing between them depends on your financial goals, risk appetite, and trading style. While intraday focuses on buying and selling within the same day, delivery trading allows you to hold stocks for longer durations.

In this blog, Lares Algotech explains the difference between Intraday and Delivery Trading in simple terms, covering their definitions, advantages, risks, strategies, taxation, and which type suits you best. Whether you’re a short-term trader or a long-term investor, understanding these two approaches will help you make smarter financial decisions.

What is Intraday Trading?

Intraday trading means buying and selling stocks within the same trading session. The primary goal is to profit from short-term price movements in the market.

For example, if you buy 100 shares of XYZ Ltd at ₹500 in the morning and sell them at ₹510 by afternoon, you make a profit of ₹1,000 (excluding brokerage and taxes).

Key points about intraday trading:

Stocks must be squared off (sold) on the same day.

Requires constant monitoring of charts, trends, and market news.

Best suited for active traders who can dedicate time to the markets.

Leverage is often used to maximize profits (but also increases risk).

What is Delivery Trading?

Delivery trading, on the other hand, refers to buying shares and holding them beyond one day. The shares are transferred to your demat account, and you can hold them for days, months, or even years.

For example, if you buy 100 shares of XYZ Ltd at ₹500 today and hold them for six months until the price rises to ₹650, you earn ₹15,000 profit (excluding charges).

Key points about delivery trading:

No compulsion to sell on the same day.

Suitable for investors with a long-term outlook.

Shares are eligible for dividends, bonuses, and voting rights.

Safer compared to intraday because short-term volatility matters less.

Intraday and Delivery Trading: The Key Differences

This table makes it clear that Intraday and Delivery Trading serve different purposes. Intraday is about short-term opportunities, while delivery focuses on long-term value creation.

Advantages of Intraday Trading

Quick Profits – If done correctly, you can generate daily income.

Low Capital Requirement – Brokers provide margins, allowing you to trade larger volumes.

Multiple Opportunities – Every day brings new price movements in stocks, commodities, and indices.

No Overnight Risk – Since positions are closed by market close, global events don’t impact you.

Disadvantages of Intraday Trading

High Risk – Prices can move quickly against your expectations.

Stressful & Time-Consuming – Requires constant monitoring of charts and market news.

Leverage Trap – While margins amplify profits, they also magnify losses.

Brokerage & Charges – Frequent trades mean higher costs.

Advantages of Delivery Trading

Ownership of Shares – You get dividends, rights issues, and bonuses.

Long-Term Wealth Creation – Benefit from compounding and long-term price growth.

Lower Risk – Short-term volatility doesn’t matter much if the company is fundamentally strong.

Flexibility – No compulsion to sell on the same day.

Disadvantages of Delivery Trading

Higher Capital Requirement – Full payment needed, no margin trading in most cases.

Tied-Up Capital – Money is locked for longer durations.

Exposure to Overnight Risks – Global events, policy changes, or company news can affect stock prices.

Slower Returns – Profits may take months or years to realize.

Taxation in Intraday and Delivery Trading

Understanding taxation is crucial when comparing Intraday and Delivery Trading.

Intraday Trading: Profits are treated as business income. They are added to your taxable income and taxed as per your income slab. You can also claim expenses like internet, brokerage, and advisory fees as business expenses.

Delivery Trading:

If you hold shares for less than 12 months, profits are considered Short-Term Capital Gains (STCG) and taxed at 15%.

If you hold shares for more than 12 months, profits are Long-Term Capital Gains (LTCG), taxed at 10% (above ₹1 lakh profit in a year).

Risk Factors in Intraday vs Delivery

Intraday Risks: High volatility, leverage misuse, emotional trading, stop-loss hitting, market manipulation.

Delivery Risks: Company performance, industry cycles, market downturns, policy risks.

Lares Algotech always advises traders to set proper stop-loss orders in intraday and diversify holdings in delivery trading.

Who Should Choose Intraday Trading?

Traders who can spend the entire day monitoring markets.

People with high risk tolerance and quick decision-making ability.

Those who prefer short-term gains over long-term investments.

Active market participants who understand charts, technical indicators, and news.

Who Should Choose Delivery Trading?

Long-term investors looking to build wealth gradually.

People with low-to-moderate risk tolerance.

Those who cannot monitor markets daily.

Investors who want ownership benefits like dividends and voting rights.

Strategies for Intraday Trading

Momentum Trading – Buy stocks showing strong upward momentum.

Scalping – Multiple small trades to capture small price movements.

Breakout Trading – Enter when stock breaks resistance or support levels.

News-Based Trading – Trade on earnings reports, government policies, or global events.

Strategies for Delivery Trading

Buy and Hold – Pick fundamentally strong stocks and hold for years.

Value Investing – Identify undervalued stocks for long-term growth.

Thematic Investing – Invest in sectors expected to boom (EV, renewable energy, IT).

Dividend Investing – Build a portfolio of high-dividend-paying companies.

Intraday and Delivery Trading: Which is Better?

There is no universal answer. It depends on your goals:

• If you want quick profits and can handle risks → choose intraday.
• If you want long-term wealth creation and peace of mind → choose delivery.

Lares Algotech’s trading tools help both kinds of investors with real-time charts, market insights, algo-strategies, and risk controls to maximize returns.

Common Mistakes to Avoid in Intraday and Delivery Trading

In Intraday:

• Ignoring stop-losses.
• Trading with borrowed money.
• Overtrading due to greed.
• Following rumors without research.

In Delivery:

• Not diversifying portfolio.
• Holding poor-quality stocks for too long.
• Ignoring company fundamentals.
• Emotional attachment to losing stocks.

How Lares Algotech Helps You Trade Smarter

At Lares Algotech, we provide:

• Algo-Trading Tools: Automated strategies to reduce emotional bias.
• Risk-First Approach: Stop-loss, margin calculators, and real-time monitoring.
• Research & Insights: Daily market updates for both intraday and delivery trading.
• Smart Dashboards: Track your portfolio performance in real-time.

Our platform is designed to guide retail investors in making safer, smarter, and more profitable trading decisions.

FAQs on Intraday and Delivery Trading

Can I convert intraday trades into delivery trades?

Yes, most brokers allow you to convert intraday positions into delivery before market close if you have sufficient funds.

Which is safer, intraday or delivery trading?

Delivery trading is generally safer since you own the shares, while intraday carries higher risk due to leverage and volatility.

Can I do both intraday and delivery trading?

Yes, many traders diversify by using intraday for short-term gains and delivery for long-term wealth.

What is the minimum capital required?

Intraday requires less capital due to margins, while delivery requires full payment for the shares.

Which gives better returns?

Intraday may give quick returns but with higher risk. Delivery provides slower but more stable wealth creation.

Conclusion

Understanding the difference between Intraday and Delivery Trading is essential for anyone entering the stock market. Intraday offers the thrill of quick profits but carries higher risk, while delivery provides long-term ownership and wealth creation.

Lares Algotech recommends that beginners start with delivery trading to build confidence and gradually explore intraday with proper strategies and stop-loss management. With the right mix of both approaches, guided by smart tools and research, you can achieve a balanced portfolio that aligns with your financial goals.

👉 Ready to trade smarter? Explore Lares Algotech’s strategic fund management and algo-trading solutions today.

What is the main difference between Intraday and Delivery Trading?

The main difference between Intraday and Delivery Trading lies in the time horizon and ownership of shares. Intraday trading involves buying and selling stocks on the same day without taking delivery, as positions must be squared off before the market closes. In delivery trading, shares are credited to your Demat account, allowing you to hold them for days, months, or even years. While intraday focuses on short-term profits through market volatility, delivery trading emphasizes long-term wealth creation. Investors should choose based on their risk appetite, with intraday being suitable for active traders and delivery better for long-term investors.

Which is safer: Intraday Trading or Delivery Trading?

When comparing Intraday and Delivery Trading, delivery is generally considered safer because it allows you to hold shares long-term and benefit from dividends, bonuses, and compounding. Intraday trading carries higher risk since trades rely on short-term market fluctuations and often involve leverage, which magnifies both profits and losses. Delivery trading minimizes daily volatility, making it a stable option for wealth creation. Intraday, on the other hand, can generate quick returns but demands constant monitoring and strict risk management. Beginners and risk-averse investors usually find delivery trading safer, while experienced traders may prefer intraday for short-term opportunities.

Can I convert an Intraday trade into a Delivery trade?

Yes, most brokers allow you to convert intraday trades into delivery trades if you have sufficient funds in your account. For example, if you buy shares during intraday but decide to hold them, you can convert the order into delivery before the market closes. The shares will then move to your Demat account, and you can keep them for as long as you want. This flexibility is a key point in Intraday and Delivery Trading, giving traders the option to shift strategies depending on market conditions. However, ensure you have enough capital for delivery conversion.

What are the advantages of Delivery Trading over Intraday?

The main advantage of delivery trading over intraday lies in ownership and long-term wealth creation. In delivery trading, shares are credited to your Demat account, making you eligible for dividends, bonuses, and voting rights. Unlike intraday trading, where positions must be squared off on the same day, delivery allows you to hold shares for months or years and benefit from compounding. Intraday and Delivery Trading differ in risk too—delivery has lower risk as short-term volatility matters less, while intraday can be stressful due to constant monitoring. Delivery trading is ideal for long-term investors focused on growth.

Do I need a Demat account for Intraday and Delivery Trading?

A Demat account is mandatory for delivery trading since shares are transferred and stored electronically in your account. Without it, you cannot hold stocks overnight. For intraday trading, a Demat account is not technically required because you buy and sell shares within the same day, and no transfer of ownership takes place. However, since most brokers provide both intraday and delivery facilities together, opening a Demat account is beneficial for flexibility. In short, delivery trading always needs a Demat account, while intraday doesn’t—but to explore both Intraday and Delivery Trading, having one is strongly recommended.

How is taxation different in Intraday and Delivery Trading?

Taxation rules for Intraday and Delivery Trading vary significantly. Intraday trading profits are treated as business income and taxed as per your applicable income tax slab. You can claim certain expenses like internet charges, brokerage, or advisory fees as business expenses. Delivery trading, however, is classified as capital gains. If shares are sold within 12 months, profits are Short-Term Capital Gains (STCG) and taxed at 15%. If held for over 12 months, profits become Long-Term Capital Gains (LTCG), taxed at 10% beyond ₹1 lakh per year. Thus, intraday is taxed as business income, while delivery follows capital gains tax.

Which type of trading requires more capital: Intraday or Delivery?

Delivery trading usually requires more capital since you must pay the full share price for ownership. In contrast, intraday trading often allows leverage, where brokers let you trade larger volumes with a smaller margin. For example, with ₹50,000, you might buy shares worth ₹2 lakhs in intraday due to leverage, but in delivery you can only purchase shares worth ₹50,000. While leverage makes intraday more accessible, it also increases risk significantly. Between Intraday and Delivery Trading, delivery needs higher upfront capital, but it is safer. Intraday requires less immediate capital but demands strict risk management.

Can beginners start with Intraday Trading, or is Delivery better?

Beginners are usually advised to start with delivery trading since it carries lower risk and helps them understand how markets work without the stress of daily volatility. In delivery, shares are held in a Demat account, giving beginners the chance to study price movements over time and benefit from dividends. Intraday trading, on the other hand, requires advanced knowledge of technical analysis, quick decision-making, and the ability to handle losses. When comparing Intraday and Delivery Trading, delivery is better for beginners, while intraday suits experienced traders who can monitor markets actively and manage risks efficiently.

Do I get dividends and bonuses in Intraday Trading?

No, intraday traders are not eligible for dividends, bonuses, or voting rights because they do not actually own the shares. Since intraday involves buying and selling within the same day, ownership is never transferred to your Demat account. On the other hand, in delivery trading, shares are credited to your account, making you eligible for corporate benefits like dividends, rights issues, and stock bonuses. This is a major difference between Intraday and Delivery Trading—intraday is purely speculative for short-term gains, while delivery offers ownership benefits along with the potential for long-term wealth creation.

Which trading style gives better returns in the long run?

In the long run, delivery trading generally provides better and more stable returns compared to intraday. This is because delivery allows you to benefit from compounding, company growth, dividends, and long-term market trends. Intraday may give quick profits, but it is highly risky and losses can be significant without proper discipline. Many experienced investors use a mix of both Intraday and Delivery Trading, where intraday provides short-term income while delivery builds long-term wealth. For beginners and long-term planners, delivery is the smarter choice, while intraday can be explored gradually with strict risk management strategies.