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intraday trading without demat account

Is intraday trading possible without a Demat account?

Many new investors learn about stock market investing from various financial influencers on social media or by reading blogs. But they don’t understand how intraday trading works and whether it requires a demat account. Further, there are many investors who wish to just do intraday trading and don’t want to invest in the long term. Such individuals often wonder if they really need to open demat accounts and pay the associated charges, if they don’t really intend to take delivery of the shares they purchase.

In this article, we will explore if intraday trading is possible without a Demat account.

What is intraday trading?

Intraday trading refers to buying and selling of financial securities in the same trading session for profit through speculation. Traders try to fetch earnings from the price movements in the stock market every minute. Intraday trading also includes trading in derivatives (futures and options). It is best suited for traders who are good at making quick decisions, can follow every market trend, and have the capacity to take risks.

Is a Demat account necessary for Intraday trading?

A Demat account is mandatory if you want to buy and hold shares for longer than a day. In other words, it is required for equity delivery trades. However, if you are looking only to do equity intraday trading or trade in futures and options (F&O), a Demat account is optional, as there is no delivery of shares in intraday trading and F&O transactions. However, brokers like m.Stock generally open a Demat account along with a trading account for their customers at no additional cost. This allows you to be both a long-term investor and an intraday trader.

Conclusion

A Demat account is not required for intraday and F&O trading, but for investors who are looking to invest for the medium to long term, it is ideal to open a Demat account along with a trading account. Further, most brokers open trading and Demat accounts simultaneously for investors at no additional cost. Thus, it is practical to open a Demat account even if you wish to only do intraday trading.

Frequently Asked Questions

If you wish to do only intraday and F&O trades, you don’t require a Demat account, as there is no delivery of assets in these segments. But if you want to do delivery trades, you must have a Demat and trading account.

It is not possible to invest in equities without a Demat account. SEBI has made it mandatory to have a Demat account to invest in equities, as it is required to hold your shares digitally.

If you don’t buy or sell shares and securities for a long period, your Demat account can become dormant. However, the broker keeps your investments safe. You could pay the reactivation fees and clear your pending dues to use your Demat account again.

Yes, you can open a Demat and trading account easily with the m.Stock trading app. It allows you to open a Demat and trading account easily from the comfort of your home.

Investors with some stock market experience, who can keep up with everyday market trends and have a higher risk appetite can participate in intraday trading.

It is essential to pick stocks having higher liquidity. Large-cap stocks are often preferred in intraday trading as they have higher trade volumes.

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