What is Square Off in Intraday Trading? | Nifty Trading Academy

Square Off in Intraday Trading

What is Square Off in Intraday Trading

If you are an intraday trader then you must know about Square off in Intraday Trading.

So, let me help you with clearing your doubts on “What is Square Off in Intraday Trading?”

From our article on “What is Square Off in Intraday Trading?” we will move further with the definition first and after that we will understand what is Intraday Trading also.

What is Square Off in Intraday Trading?

Square off is a trading style that is used in Intraday Trading.

In which most of the trader buys or sells a particular quantity of an asset (that contains mostly stocks of a particular company).

Later in the same day, by using square off your position or your transaction gets reverse with the point of view to earn a profit on that position.

Let’s understand this with an example:

For instance, Mr. A buy 00 shares of a particular company from the NSE Nifty exchange through a broker at a price of Rs 15 per share.

Later in the same day, Mr. A sells his share in the exchange before the market closes down and sells shares at Rs 18 per share.

After paying the broker charge that is around Rs. 20.

The net profit that Mr. A earns is Rs (300-20) = Rs280.

Therefore, the trader has basically squared off his position.

What is Intraday Trading?

Intraday Trading defines the trading that took place within the same Intraday as the positions are taken in place when the market opens and the positions are squared off on the same Intraday before the market closes down.

Intraday trading is done by traders with the mentality to make more money in trading and booking short term profits.

The shares that are bought or sold in Intraday trading are not transferred to the Demat account of the trader as the shares or the position get squared off before the market closes down on each Intraday.

These shares or position taken by the traders are only visible to their trading account and not on their demat account.

These shares required to be squared off before the market closes down by the trader but if in case the trader forgets to square off then the system automatically squared off these position on the behalf of them.

The shares bought or sold by the trader are only available to the trader for just one Intraday and that’s why it is also known as intraday trading.

These trading offered the traders lower margins and brokerage on their transaction.

The main aim for the intraday trading is about the churning of the capital.

Now, further, I am going to state about the execution of intraday trading.

How the trader can execute the Trades in Intraday Trading?

When you want to trade in the intraday trading then you need to select the “MIS” option that is especially for the intraday trading stock market orders.

The trades can be executed from any of the media like an online or offline trading platform.

In this trading type, the shares are visible in the trading account after the execution.

So, this was about the trade execution part now will see the margins you need to pay for the intraday trading.

Which type of margins paid for the trading?

In Intraday trading, the trader needs to insert the stop loss and the profit targets when they are punching their trades.

They are also provided with huge leverage in the trading that is structured as the Cover Order.

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