Posted on September 12, 2009 by Nayab Naseer

Day trading is the concept of purchasing shares and selling them on the same day, without taking delivery of the stocks, taking advantage of the intra-day fluctuations of the share prices. This is speculation at its best, for the intra-day movement of prices in the stock exchange is based almost wholly on market sentiments and not on the performance of the company. The intra-day share traders either buy the shares an sell them hen prices go up, or else they sell short, that is they sell shares they do not posses in anticipation of prices falling, and then purchase them to cover for their short positions before the day ends.

The advantage of intra-day trading for share traders is that the broker takes a lesser commission, and since they complete the buying and selling on the same day, they need not invest the entire money to buy the shares. The broker usually allows intra-day transactions with the trader depositing ten percent of the amount with the broker.