What it means
On many Indian broker platforms intraday orders are tagged MIS and delivery orders CNC; NRML is used for carrying futures and options overnight. Intraday trades can use leverage from the broker but must be closed before the market shuts, or the broker closes them. Delivery trades have no deadline and no leverage.
In practice
The choice decides the rules of the trade. Intraday suits short-term trades on the day's movement, needs less money because of the broker's leverage, and carries lower taxes and charges. Delivery suits positions held for days or years and is the only way to actually own the shares.
The order type is chosen when the order is placed, so it is worth checking each time: a position meant to be held but entered as intraday will be closed by the broker in the afternoon.
What to watch for
The broker's automatic close near the end of the day happens at whatever price is available, usually with an extra fee. Leverage on intraday trades makes losses as large as gains, and a stock that hits its circuit limit may not be closable at all.
Related terms
5 terms- Demat accountThe account that holds your shares and other securities in electronic form; you need one to invest in the Indian stock market.
- LeverageControlling a position larger than your cash; it magnifies gains and losses equally.
- STTSecurities transaction tax: a tax the Indian government charges on every trade made on a stock exchange.
- Indian market hoursIndian stock exchanges trade from 9:15 am to 3:30 pm India time, Monday to Friday, with a pre-open session from 9:00 am.
- Trading styleHow long you hold trades: scalping (minutes), day trading (flat by the close), swing (days to weeks), position (weeks to months).