WHAT IS THE DIFFERENCE BETWEEN AN INTRADAY AND OVERNIGHT POSITION?

500 Per Crore / Nov 08, 2021

As an investor in the stock market, you should be aware of the difference between intraday and overnight position trading. This is because it has become crucial for new traders to understand the future margin requirements and their respective time cutoffs to exit positions before the close. Well, in this blog we'll discuss what is Intraday and overnight position and what is the difference between them.

 

WHAT IS INTRADAY POSITION?

Intraday trading or day trading, refers to buying or selling of stocks and other financial instruments within the same day. In simple, intraday trading means all positions are squared off before the market closes for the day. In day trading, an investor cannot enjoy the ownership of shares as a result of the trades.

 

WHAT IS OVERNIGHT POSITION?

The Overnight position is a long or short position that is not flattened before the end of trading day. The initial margin set by the applicable exchange should be met and the position may be liquidated by the broker with an additional fee incurred.

If the position remains open, there are possibilities that the account will incur a margin call or a request from the broker to bring the margin deposits up to the required levels. To meet the initial margin requirement, the client is given with 24 hours time to wire funds in to the respective trading account.

 

DIFFERENCE BETWEEN INTRADAY & OVERNIGHT POSITION:

When an investor purchases a stock, he or she can hold it for an indefinite period. However, if an investor wishes to sell the stock on the same day or on the date of purchase, then it's called an intraday position. If the investor plans to hold the stocks for one or few nights before selling is called an overnight position. You can also name it as BTST if you wish to carry the position over night and sell on the next day.

 

CONCLUSION:

Choose the best investment strategy that meets your financial requirements. Both Intraday and Overnight positions have it's own unique benefits over others and it's up to the investor to make a wise decision on choosing the best investment strategies that meets their financial requirements.

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