When Is Intraday Profit Credited?

When Is Intraday Profit Credited?

Understanding Intraday Trading

Intraday trading, also known as day trading, involves buying and selling shares within the same day. This practice ensures a net position of zero by the end of each trading session. According to a new mandate by the Securities and Exchange Board of India (SEBI), any profit that you gain from an intraday trade will be unblocked for use only after the markets close on a subsequent day.

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Table of Content

  1. Understanding Intraday Trading
  2. SEBI New Rules of Intraday Trading
  3. Understanding Intraday Profit Crediting with an example

SEBI New Rules of Intraday Trading

Effective March 1, 2021, the Securities and Exchange Board of India (SEBI) announced new regulations regarding intraday trading. These guidelines specify that funds generated from intraday trading will be accessible for use upon the closure of stock exchanges on the subsequent business day. Therefore, any gains accumulated from intraday trading cannot be used for further transactions on the same day, as they will be credited to the trader's account after the following working day. 

Understanding Intraday Profit Crediting with an example

A better way to understand this concept is with the help of an example. 

Let us assume you have engaged in three intraday trades on May 10, terming it as T (transaction) day.

DateTypeQtyMarket PriceValue
10th May 2024Buy10100010,000
10th May 2024Buy812009,600
10th May 2024Sell18130023,400

Let us say you have acquired 10 shares at a unit price of Rs. 1,000 each, and an additional 8 shares at a unit price of Rs. 1,200 each, resulting in a total investment of INR 19,600. Upon selling 18 shares at Rs. 1,300 per share on the same day, you earned a total of Rs. 23,400. This transaction will generate an intraday profit of Rs. 3,800. Now, let us examine the implications of this development across three scenarios.

Situation 1: T Day Falls On A Weekday

Under the new SEBI rule, you will receive the intraday profit of Rs 3,800 on T+1 day only. Here T is May 10, so T+1 will be May 11. It is assumed here that May 10 is a regular trading day and May 11 is a working day. You will be able to access this profit at 3:30 p.m. on May 11, after the market closes for the day.

Situation 2: T Day Falls On a Friday

If May 10, known as T Day, falls on a Friday, then your intraday profits will be unblocked at the end of the T+1 working day and not on May 11, which occurs on a Saturday. The next working day will be May 13, Monday. Your intraday profit will be unblocked at 3.30 p.m. on May 13.  

Situation 3: Market Holiday

If (T+1) is a holiday, then the profit will be released in your online trading account at 3:30 PM on the next working day.

Conclusion
Earlier, intraday profits were credited immediately by most brokerage firms. However, a recent policy change has altered this process. Traders must acknowledge the fact that any profits gained from intraday will only be accessible post 3:30 pm on the next trading day. This adjustment deviates from the previous rule, where traders could use profits from same-day trades for further trading activities. Under the new rule, the immediate availability of profits is no longer feasible, until the closure of the following trading day.  Hence, if you are also looking to make subsequent profits in intraday trading, open a demat account today with BlinkX and start trading. 

SEBI's new rule on intraday profit marks a crucial moment in the regulation of the Indian securities market. It aims to curtail speculative trading practices and promote stability and fairness in the market. This move underscores SEBI's commitment to safeguarding investor interests. While it may pose initial challenges for some traders, the long-term benefits of enhanced market integrity and investor protection cannot be overstated. As market participants adapt and evolve by these regulations, the Indian securities market is assured of resilience and sustainability, ensuring its role as a vital engine of economic growth and prosperity.  

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FAQs on When is Intraday Profit Calculated

 Intraday trading involves buying and selling stocks within the same trading day, with positions usually being closed out before the market closes. If you keep the stocks overnight, it will not be considered intraday trading anymore, however, since you are holding onto them for the next day.

As per new SEBI guidelines, the intraday settlement time will be post 3:30 pm on the next trading day.

Delays in crediting intraday profits may occur depending on the broker's policies, market volatility, and processing times. 

You can check if your intraday profits have been credited by reviewing your brokerage account statement or accessing your online trading platform for transaction history. 

The factors affecting the timing of intraday profit crediting include market volatility, trade execution speed, and the efficiency of settlement processes.

Intraday trading profits may be subject to fees or charges such as brokerage commissions and exchange fees. 

Yes, the timing of profit crediting can vary across different trading segments. 

If you have not received your intraday profits within the expected timeframe, verify your trading platform's policies and contact customer support for assistance. If the issue persists, consider contacting your bank or financial institution to ensure there are no processing delays.