Intraday Profit Settlement Time

Intraday Profit is the most important query among the intraday gainers as they ask, ‘Can I use intraday profit on the same day?’ 

No, you are not allowed to utilize the profit earned on the Intraday investments on the same day. 

Technically, SEBI has set up a restriction on such profit earnings for your reinvestment on the same day. 

Instead, you can opt credit from your stock broker  through a leverage to continue your trading on the day you earn profits.

Then, the question that arises is when will the profit be credited into your trading account? In the coming up lines, you can have a glimpse as to how your profits are credited. 

New Guidelines for the Credit of Intraday Trading Profit:

Important Note: 

Way back on March 10, 2021, SEBI made it compulsory to block the trading profit and get it released only on the following day by 03:30 pm.  

In intraday trading, you can make multiple trades within a trading day but have to square off your positions before the end of the day. This means that when you select intraday trading as the order type, you have to sell the shares that you have bought on the same day and vice versa.

Let me illustrate,

Limitations of the Intraday Profits:

You are free to execute multiple trades in Intraday trading sessions, and those trade positions must be squared off before the end of the closing session. 

Similarly, you will have to buy back the share put for sale on the same day trading. 

You can adopt the margin amount procedure provided by your stock broker and set it in a buy position in which you will be making a payment of only a fraction of the total transaction value.  Here, too, you will have to square off the set in order and book your profit. 

In case you want to manage your losses then you can convert the loss to deliveries and take the existing business to the next day. However, this is not the subject of our discussion. 

Practical Example: 

On a day, say, you make two purchases at two different instances say, 1000 shares of XYZ limited @ ₹10 per share that sum up to ₹10,000.00, and then again 1500 shares of XYZ limited @ ₹15 per share that sum up to ₹22,500.00. Hence, the total investment made is ₹ 32500.00

You close the two trade positions, @ ₹20 per share that sum up to ₹ 50,000.00. The profit earned by the end of the day is (₹ 50,000.00 – ₹ 32500.00 = ₹ 17500.00). 

The profit earned on the day is  ₹ 17500.00 and that shall be credited into your trading account on the following day by 03:30 pm. 

General Formulae:

Consider intraday trading day as ‘T’ and ‘T+1’ the day following it then, three scenarios arise, 

If ‘T’ and ‘T+1’ are working days, then the profit earned (₹ 17500.00) on ‘T’ day will be credited on the ‘T+1’ day, by 3:30 pm, and until then your profit shall be blocked. 

If ‘T’ is Friday and you earned a profit (₹ 17500.00) then this amount shall be blocked until Monday, 3:30pm, and then it will be released. 

If ‘T+1’ is the non working day, then the earned profit (₹ 17500.00) will be blocked and it will be released whenever the next working day is.