hi,
i am just new to the forum and just like to say a big hi to all
i would like to know what exactly is intra-day trade.
does selling a scrip bought a week earlier and then buying back the same scrip on the same day constitute an intra-day trade?
Intra-Day trading is generally called Day Trading too.
Day trading is a trading activity which involves buying and selling stocks, commodities, etc., with in the same trading day.
For example, one could buy 100 stocks of ABC. If he or she sells it off on the same day (sale of 100 of ABC), you have no stocks to carry home. This is basically day trading.
Day trading generally (in most markets) works in two ways.
1. You can buy before you sell (You anticipate the price to move up and you make profits)
2. You can sell before you buy (here you anticipate the price to come down and you make profit)
If I predict price of stock ABC will go up today, I will buy at Rs100 and I will sell when the stock reaches Rs.105. In this case, my profit is Rs.5/- per share.
If I predict price of stock ABC will come down, I will sell ABC for Rs.100 and I will buy when the stock reaches Rs.93/- In this case my profit is Rs7/- per share.
In either case, profit is
Price Sold - Price bought
If you buy expecting the price to move up, then your position is called "Long" and your attitude is "bullish".
If you sell expecting the price to come down, then your position is called "Short" and your attitude is "bearish"
If you have a Long or Short position, you will do a contra transaction on the same day. That means, If you have bought, you will sell. If you have sold, you will buy. This contra transaction is called "Squaring off" your position.
Irrespective of the nature of your position (long or short) once you square off, then you have no "open position". You have cleared your obligations.
Hope this helps.