The stock trading business is certainly one of the most lucrative options to earn some quick money. No doubt, the risks involved in this kind of trading are also quite significant. There are many types of trading options to choose from, and one of them is the Intraday Trading.
Like the name suggests, in this type of stock trading, the stocks are purchased as well as sold on the same day itself. So, it is like you purchase a certain amount of stocks of a company and sell it back to the market before it closes.
There are many advantages associated with intraday trading, and this is the reason why traders love it.
Top Ten Benefits of Intraday Trading
- In this case of intraday trading, you can make profits in almost any direction. It means that as a trader you can opt for short selling, which is not quite possible for the long term investors. So, no matter if it’s a falling market or a rising one, you will surely make profit.
- Since the margin in this form of trading remains quite less, therefore it provides you the leverage to purchase more. In other words, it means that traders can trade with more amount than what they have in their account.
- If you have control over your ego, then intraday trading can prove to be quite profitable for you. All you need to know is when to stop.
- The brokerage commission associated with this form of stock trading is quite lesser when compared to the other forms of trading. In fact, the amount usually remains one-tenth of the normal one. Since the taxes are usually applied on the brokerage commission, therefore the amount remains low.
- When you opt for intraday trading, the risk of overnight does not apply in this case. Since you square off your stocks before the closing of the market, therefore you can certainly enjoy a tight sleep at your home. No doubt, the world of the stock market is quite unpredictable and anything can happen overnight. This is the reason why many traders opt for intraday trading.
- Another benefit that you get with this form of trading is that you begin and end with cash. When you square off the stocks, then you again have cash in your hand, which can be used for trading on the next day.
- There are many sectors on which you can place your money as per their performance, such as social media companies, oil companies, financial companies, etc. So, with intraday you can choose your sector on a daily basis, according to their present performance.
- In this form of trading, you can trade as many times as in a day you want. You can purchase and sell stocks like twice or thrice a day.
- The amount of stock analysis required for this kind of trading is not that tough. You can easily start with a small amount and gain experience.
- Owing to the high exposure associated with intraday trading, traders can even use their small funds for big trades.