Let us understand the nuances of intraday trading first.
What does intraday trading mean?
Intraday means ‘within the day’, and as the name suggests, the time period for this trading strategy lasts within the business hours of a single day. In intraday trading, you buy stocks / ETFs after the market opens and sell the same before the market closes on the same day.
Intraday trading is generally followed by investors looking to make quick profits from small fluctuations in stocks between the openings and closing of the market on the same day. This strategy is lucrative but generally requires expertise & constant monitoring of the market.
You pay the short-term capital gain on every profitable sale you make on these stocks when it comes to taxation.
Can you do intraday trading on smallcase?
You can buy & sell stocks in your smallcase investment or the smallcases themselves on the same day via manage orders.
You may incur brokerage charges for intraday trading as per your broker guidelines.
However, smallcases are not intended to be used for intraday purposes & are long term investing instruments.
We understand that the obvious next question you have is,
Why are smallcases focussed on long-term investments?
– Long-term investing is like a shock-absorber. It absorbs the ups and downs of the stock market and helps you grow your money despite the fluctuations or volatility. smallcases are designed to help you invest in amounts convenient to you over a long period of time, which allows you to get an even acquisition cost as well as a stable portfolio.
– Experience the power of compounding. The longer you remain invested, the more time your money could have to potentially grow. Compounding is the simple concept of how any returns on your investments get reinvested, and you gain returns on your returns. Just like that, your money could grow even further over time.
Ram invests ₹10,000 and earns a 5% return on this investment. In year one, Ram makes ₹500, which is reinvested. In year two, Ram makes a return of ₹525 because not only has he made a return on his initial ₹10,000 but also on the ₹500 invested returns he has earned in the previous year. Repeated over several years, compound returns could help Ram’s investment grow exponentially.
– Every time you buy and sell stocks, you are usually paying brokerage & trading fees, so the more you jump in and out of the market, the higher your fees could be. The more fees you pay, the lesser the overall profits / returns. In long-term investing, you keep these fees to a minimum and make the most of your returns. When you invest in smallcases, you only pay fees required on the overall smallcase and not on each stock.
– For long-term investing, you don’t need to be a finance guru or carry your investment screens to the washroom. You invest and relax. Let managers do their job while you do yours. The managers do all the research and hard work while you save time and effort.
– Staying focussed on your long-term goals could help you keep your emotions at bay & avoid irrational decisions at the time of a market dip.