Intraday trading involves buying and selling securities within the same trading day, primarily applied to equities. The benefits of intraday trading include lower trading costs when a position is squared off (closed) within the same day, attributed to the fact that Securities Transaction Tax (STT) rates are lower for intraday trading compared to delivery trading, where a position is not closed within the same day.
Generally, day-traders engage in intraday trading, while investors are not commonly associated with it. Due to the quick entries and exits in intraday trading, proper risk management is crucial for generating profits. Intraday traders, aiming for higher turnover, often choose brokers, such as discount brokers, that charge low brokerage rates.