What is an Intraday Order? MIS Orders Explained for Indian Traders
An intraday order is a trade where you buy and sell shares within the same trading session. You do not take delivery of the shares. By 3:30 PM, or earlier depending on your broker's cut-off, all intraday positions must be closed. On most broker platforms in India, this order type is called MIS, which stands for Margin Intraday Square-off.
Say you notice SBI is moving strongly in the morning. You buy 200 shares at Rs.800 using an MIS order at 10 AM. By 1 PM the price reaches Rs.815. You sell the 200 shares and pocket a Rs.3,000 profit. If you had not sold by the broker's cut-off time, typically around 3:15 to 3:20 PM, the broker would have automatically squared off your position.
How is an intraday order different from a delivery order?
| Feature | Intraday (MIS) | Delivery (CNC) |
|---|---|---|
| Holding period | Same day only | As long as you want |
| Share ownership | No delivery, no demat credit | Shares credited to demat account |
| Margin required | Lower, broker provides leverage | Full payment required |
| Auto square-off | Yes, before market close | No |
| Dividend eligible | No | Yes |
| Best for | Short-term price movement trades | Long-term investing |
What is the advantage of MIS orders?
The main advantage is leverage. Brokers provide additional buying power for intraday trades, sometimes 5x or even 10x your available capital. If you have Rs.1 lakh in your account, you might be able to take an intraday position worth Rs.5 lakh. This amplifies both your profits and your losses.
The other advantage is that you can profit from both rising and falling prices. You can sell first and buy later within the same day, which is not possible with delivery orders.
What are the risks of intraday trading?
Leverage works both ways. If the stock moves against you by 2% and you have 5x leverage, your actual loss is 10% of your capital. SEBI data shows that a large majority of individual intraday traders in India lose money. The combination of leverage, fast decision-making, and transaction costs makes consistent intraday profitability very difficult.
Auto square-off is another risk. If the market moves sharply against you near the close, the broker may square off your position at the worst possible price. You can access intraday trading through Stockk at stockk.trade/products/equity.
Intraday trading involves substantial risk. SEBI data shows most retail intraday traders incur losses. This article is for educational purposes only.
Frequently Asked Questions
What happens if I forget to close my MIS position before market close?
Your broker will automatically square off the position, typically 15 to 20 minutes before market close. The auto square-off happens at the market price available at that time, which may not be favourable. Some brokers also charge a penalty fee for auto square-off. Always close your intraday positions yourself rather than relying on the broker's auto system.
Can I convert an intraday order to a delivery order during the day?
Yes, most broker platforms allow you to convert an MIS order to CNC (Cash and Carry / delivery) during the trading session, provided you have sufficient funds in your account to cover the full value of the shares. Once converted, the shares will be delivered to your demat account on T+1 and you can hold them as long as you want.
Is there a minimum amount required for intraday trading?
There is no fixed minimum, but practically you need enough capital for the margin required on at least one lot or a meaningful quantity of shares. Most experienced traders suggest having at least Rs.50,000 to Rs.1 lakh for intraday trading to manage risk properly. More importantly, only use money you can afford to lose completely.
What is the best time for intraday trading?
The first 30 minutes after market open, from 9:15 to 9:45 AM, tend to be the most volatile and risky. Many experienced traders wait for the initial volatility to settle. The period between 10 AM and 12 PM is generally considered more stable for trend-based intraday trades. The last hour before close can also be volatile as traders square off positions.
How are intraday trading profits taxed?
Intraday trading profits are classified as speculative business income under the Income Tax Act and taxed at your applicable income tax slab rate. This is different from delivery-based equity trading where short-term gains are taxed at 20%. Intraday losses can only be set off against speculative income, not against other types of income. Consult a CA for your specific situation.
Investments in securities market are subject to market risks. This article is for educational purposes only and does not constitute investment advice.
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