What are Intraday Returns?

What are Intraday Returns?

Intraday return signifies a store's profit or loss within regular trading hours, spanning from the market's opening to its closing. Many traders often come across the common query which is the intraday returns. Understanding a stock's performance involves dissecting its daily returns, comprising various components. Together, these components constitute the total daily return of a stock, reflecting its overall fluctuations. This comprehensive measure provides insights into how stock price works within market hours versus its performance across successive trading days. This blog details intraday returns' significance and answers what intraday returns are, their relationship with overnight returns, and their combined influence on a stock's daily performance.

What are Intraday Returns?

Intraday returns are one of two components of a stock's overall daily return. During regular trading hours, intraday returns measure how much stock makes based on the price change from the start to the end of the day. Intraday Returns is also known as daytime return.

Additionally, intraday returns and overnight returns together make up the total daily return on a stock. The total daily return is based on the price change of the stock between the close of one day and the close of the next. Furthermore, the intraday returns are a bigger contributor to the total return than the overnight returns. Moreover, it suggests that overnight returns and intraday returns are negatively correlated.

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Table of Content

  1. What are Intraday Returns?
  2. What is Intraday Trading?
  3. Uses of Intraday Trading Returns
  4. Intraday Returns vs. Overnight Returns
  5. How to Calculate Daily Returns?
  6. What is Considered a Good Intraday Return?
  7. How to choose stocks for Intraday Trading?
  8. Mistakes to avoid while doing intraday trading

What is Intraday Trading?

The term intraday trading refers to trading stocks on the same day. So, when buying stock for a company, you must specifically indicate 'intraday' in the platform's portal. This lets you buy and sell stocks of the same company before the stock market closes. In this trading, profits are earned by following market indices. It's also known as day trading.

Uses of Intraday Trading Returns

  • Intraday price and volume data are often used in technical analysis and investment strategies to exploit security momentum, moving averages, and unique cycles.
  • Furthermore, intraday returns are important for brokerage margin accounts and collateral exchanges between international financial institutions.
  • When intraday returns are high, brokerage firms may trigger margin calls to clients if they have extended margins.4

Intraday Returns vs. Overnight Returns

Understanding the differences between overnight and intraday returns is essential to understanding the dynamics of a stock's performance. Intraday returns track a stock's price movement from starting to closing during regular trading hours. This measure highlights gains or losses made throughout the trading session and captures the daily price movement.

Conversely, overnight returns indicate how much a stock has changed in value between the end of one trading day and the end of the next. It displays the effects of outside variables like market mood, world events, or news about a particular firm that breaks after the market closes. Because overnight events may significantly alter intraday returns, overnight returns are important for evaluating a stock's overall volatility and behaviour.

Analyzing both intraday and overnight returns provides a comprehensive understanding of a stock's daily performance, aiding traders and investors in making informed decisions regarding their trading strategies and risk management.

How to Calculate Daily Returns?

Many brokerages offer daily return statistics immediately, saving investors the trouble of doing computations by hand. Nonetheless, knowing how the calculations are made is still useful. The math is simple: multiply by the number of shares owned after deducting the opening price from the closing price.

Take ownership of 100 shares of ABC stock, for example. A gain of ₹20 per share is realised on a day when the stock begins at ₹100 and closes at ₹120. This gain, multiplied by the 100 shares that are owned, results in a daily return of ₹2,000.

On the other hand, some investors like dealing in percentages. Divide the gain per share for the day (₹20) by the opening price (₹100) to find the percentage gain (0.2). The daily return of 20% is obtained by multiplying by 100, which represents the percentage rise in the stock's value for that trading day.

What is Considered a Good Intraday Return?

A strong intraday return is contingent upon your unique investing approach and level of risk tolerance. Since every day is unique, traders know it is psychologically far more beneficial to estimate their gains weekly or monthly. Any gain from trade is regarded as spectacular if you are a novice trader.

How to choose stocks for Intraday Trading?

In intraday trading, picking the right stocks is the first and most important step. Because investing money is only worthwhile if you get a return, otherwise, it's all for nothing. So, here's how to pick a good intraday stock:

  • Don't buy volatile stocks: It's always better to avoid stocks that look unstable. There's no point putting your money into something you might never get back. Thus, it's a good idea to track stock behaviour and consider trading over potentially stable stocks. 
  • Make a correlation between stocks and geopolitics: You should invest in stocks that correlate with major sectors. Stock prices might go up if the index for the sector goes up, too. For example, strengthening the Indian Rupee against the Chinese Renminbi will affect the iron industry. As a result, exports would increase and stocks would rise. Thus, you'd do better if you picked stocks while keeping in mind such market conditions. 
  • Take the time to research: Unless you've got luck on your side when you trade, nothing goes right without proper research. Thus, before trading, it is always necessary to do your research. 
  • Analyze trends: Find out what stocks are generating the most interest from traders or what the general flow is in the market. Stocks that perform well in a rising market must be looked for, and stocks that perform poorly in a falling market should be kept out.

Mistakes to avoid while doing intraday trading

Intraday trading is challenging and risky. Thus, you need to perform the right trades and book profits. Also, the key is managing risks and staying focused on the current market trends. However, almost 90% of intraday traders lose their money by making just one mistake. Below are the biggest intraday trading mistakes to avoid:

1.Not Analysing the Past Performance of the Stock

To make the best decisions, traders should study and analyse the past performance of stocks and companies. One of the biggest mistakes intraday traders make is picking stocks too fast. Take your time when trading and pick the right stock.

2.Going by Tips

Profitable tips are easy to get, but making money with these tips is not. Thus, self-trading is the best way to earn profits in intraday trading. Also, it might be profitable to get tips from experienced traders, but not always. To trade effectively, you must learn the charts, understand the structure, and trade independently.

3.Not Placing a Stop-loss Order

The purpose of a Stop-Loss order is to instruct the broker to sell the stock as soon as possible when the market drops below a predetermined price. When the market falls, this order gets executed immediately, preventing losses. However, the high-risk appetite of day traders makes them look to earn more profit. As a result, they forget to place a stop-loss order. Remember, you can save a lot of money by placing a stop-loss order before the market drops.

4.Trading in Illiquid Stock

One of the biggest day trading mistakes is trading in illiquid stocks without proper research. Intraday trading depends heavily on the liquidity of a stock.

5.Not looking at the whole market

Traders often catch the trend and ride it until they close, but it's not that simple. Fundamental investors must go in-depth and analyze stock performance. To better understand the market, intraday traders must understand the trend running through the market and take a 360-degree view.

6.Being too Emotional

In intraday trading, the primary rule is not to get too attached to profits and losses. Traders should always keep emotions aside and not let losses affect their trading. 

7.Avoiding Trading Plans and Trading Diary

Trading plans outline how intraday trades should be conceived and executed. A trading diary helps traders identify weak areas and improve their strategies. A trader who ignores the trading plan and the trading diary will have trouble succeeding as an intraday trader.


By buying and selling stocks within a single trading day, intraday traders try to take advantage of price fluctuations. To assist in this, using a reliable share market app can be incredibly beneficial. Here, traders aim to make money by following market indices. Further, intraday returns, which measure price changes during trading hours, are key to technical analysis and margin accounts.

Moreover, a good stock pick involves avoiding volatility and considering market conditions. Additionally, in-depth research, trend analysis, and risk management are essential. Also, try to avoid mistakes such as neglecting past performance analysis, relying on tips, and not using stop-loss orders. When these aspects are carefully considered, intraday trading can be rewarding.

Intraday Returns FAQs

A good intraday return depends on your investment strategy and risk tolerance. However, any profit you make as a new trader is considered exceptional.

You'll get a 1% intraday return if you open and close a position within market hours, and that position makes 1%

According to stock market analysts, it is best to buy intraday trading stocks between 10.15 a.m. and 2.30 p.m.

It is recommended to hold intraday trading for one or two hours following the stock market opening.

No, you must sell your stocks before the market closes on the same day.