Everything you always wanted to know about Zerodha Intraday Trading
What is intraday trading?
Intraday trading, also known day trading, refers to the buying and selling of stocks and other financial elements within the same day. In other terms, intraday trading means all positions are settled before the market closes and there is no variation in ownership of shares as an outcome of the trades.
Until recently, people understood day trading to be the field of financial firms and professional traders. But this has changed nowadays, thanks to the rising prominence of electronic trading and margin trading.
Today, it’s very much simple to start day trading. If you want to begin, read on to understand the basics of intraday trading:
Difference between regular trading and intraday trading
There’s only one difference between a regular trade and intraday trade. It mainly lies in obtaining the delivery of the stocks.
In intraday trading, you settle your positions the same day. Thus, your sell order offsets your buy order. Because of this, there is no transfer of ownership of shares. On the other hand, a regular trade gets squared off over a span of days if not longer. This means, you get delivery of the shares you subscribed while the shares you sold move out of your demat account.
In today’s competitive stock trading landscape, there are lots of stock brokers available that offer intraday trading and among them, Zerodha is a leading one. Let’s get to know everything about Zerodha intraday trading below.
Zerodha Intraday Trading Demo
There are two routes to perform Zerodha Intraday Trading Rule:
In the offline trading mode, a trader needs to make a call to the Zerodha call & trade section. To place a trade, he or she needs to know the “telephone code”. Earlier, it was called Zerodha ZPin.
The purpose behind the use of this pin is to authenticate and verify the identity of the trader before the order placement. If a person calls from the registered phone number, she/he is supposed to enter the telephone code in the IVR for accessing the support representative.
On the other hand, it he or she calls from another phone, one is expected to enter the registered phone number followed by the telephone code without any space or any character in between. This telephone code can be viewed by logging into the Zerodha Backoffice and checking the Profile screen.
Zerodha has various trading platforms for use that can be referred to place an order online. One such example is Zerodha Kite. One just need to login to his/her account and make intraday transactions.
There are several other similar trading platforms such as Zerodha Pi, Zerodha Kite Mobile App and you may choose to use any of these applications based on your preferences.
Zerodha Intraday Orders
Before you try your hands on Zerodha Intraday trading, it is necessary to brush up your knowledge on the basic types of orders. Here is an example for better idea.
Let’s say a trader wants to buy a single share of ITC at Rs. 261 for intraday trading, then he will come across the following elements during the transaction.
- MIS– MIS means Margin Intraday square off. This type of order can be placed only for Intraday trading using leverage. Leverage is mentioned in the range of 3 to 14 times basis the risk and instability of every stock.
If one does not settle MIS trade before the market closes, it gets settles on its own at around 3:20 pm.
- CNC– CNC stands for Cash and carry. This order is placed for orders placed for over 1 day and not for intraday Zerodha trading.
- Market Order– This order is placed to buy or sell shares at the market price of that instantaneous.
- Limit Order– This order is placed to buy or sell shares at a specific price or better.
- SL Order– This order is employed for placing a stop loss at the limit price. You are supposed to submit a trigger price. As soon as the trigger price is achieved, the stop-loss order is forwarded to the stock exchange at the limit price.
- SL – M Order– This means Stop Loss order at market price. While placing this order, one is supposed to enter a trigger price. When the trigger price is reached, the stop-loss order is sent to the stock exchange at market price.
- Disclosed Quantity– This option is available to reveal a part of the actual order of the number of stocks placed to buy or sell shares.
- Bracket Order – BO stands for Bracket order. In this type of order, one needs to place an order to either buy or sell stocks at limit order with a goal price. This needs to be compulsorily attended by a stop loss.
BO order is quite useful in gaining more leverage in comparison with an MIS order. BO orders need to be settled by the end of the day at around 3:20 pm for equity and Futures and options, at 4:30 pm for Zerodha currency trading.
Bracket orders cannot be usedin case of commodities. They can be placed for equity, futures & options and currency trading.
- Cover Order – CO stands for Cover order. Like the bracket order, it is also used for higher leverage than MIS trade. Stop loss needs to be stated and the buy or sell trade is performed through a market order.
Leverage provided for cover orders is nearly double as compared to MIS trades, extending from 6 to 20 times.
Cover orders need to be settled by the end of the day at around 3:20 pm for equity and Futures and options, at 4:30 pm for currency trading and 25 minutes before closing for commodities.
It is important to note that there is always an option to use some of the best Zerodha Intraday tips while placing orders.
Zerodha Intraday Trading Charges
Here are the various charges including brokerage levied for Zerodha Intraday trading:
- Zerodha Brokerage becomes applicable every time you place an order. With Zerodha, higher trade value does not mean higher brokerage since they have limited it at an optimum level of ₹20.
- STT or Securities Transaction Tax is charged by the stock exchange such as NSE or BSE and is usually placed on the sell side of the trade.
- Turnover Charges are levied on both ends of the trade by a particular exchange.
- SEBI charges, as the name implies, are charged by the regulator itself i.e. SEBI
- GST or Goods and Service Tax is basically a central government levied-tax.
- Stamp duty charges are levied by the state government.
Apart from the above-mentioned charges, stamp duty and DP charges are also levied for each transaction. It is to keep in mind that stamp duties are different for each state.
Zerodha Intraday Trading Time
During the market opening hours, one can choose to perform Zerodha intraday trading any time. However, one should stay cautious while winding up the position. If an open intraday MIS / BO / CO position has not been squared off before the closing of the market, it gets automatically settledroughly 3:20 pm.If in case, the intraday trading position has not been settled till the closing of the market, the position gets transformed into CNC position.This tends to move forward to the next trading day and gets settled by Zerodha automatically if the asked amount of cash is not available in the account.
Zerodha Intraday Trading Margin
Trading in futures is utilized which refers that only a small amount of money known as “margin” should be there in the account to make an intraday future.
The margin calculator of Zerodha providescomprehensive details of margin necessities during futures trading. One is supposed to enter all trade-related information in order to compute comprehensive margin requirements for any specific trade. The margin calculator has a detailed and thorough list of all stocks along with the MIS and CO / BO margin/leverage.
Zerodha Intraday Trading Tips
Frankly, there is no set pattern you can refer to in order to generate profits out of Zerodha intraday trading. However, you can refer to some proven tips that might be of some help in executing the trade.
- Carry out a detailed technical inspection of stocks for the sectors or stocks you are evaluating. There are several technical indicators, charts, heat maps, screeners and other associated tools that can help you to make sound trading decisions.
- Use any mode of order placement. In case of online, then you just need to choose a particular scrip. You may choose to place the order type as MIS for example.
- Preferably, you should place a stop-loss price in order to limit your losses if the trade goes in the opposite direction against your opportunities.
- It is totally logical to use a trailing stop-loss order in order to make higher profits.
- Use margin to the level that is based on your risk craving. This is because using margin is a double-edged sword.
With the presence of brokerage and margin calculators, Zerodha intraday trading has become a lot simple and effective. These calculators enable the precise monetary value related to every type of intraday trade.
There is no need to make an intraday trade just to check margin requirements. He or she can be assured that every single penny being levied or blocked during a trade.
The key to successful Zerodha intraday trade is complete knowledge and smart trading.