No, the demat account has nothing to do with your intraday trades. An intraday trade is when you buy in the morning and sell the same day or when you sell in the morning and buy back the same day. An intraday trade does not result in delivery and hence there is no question of impacting your demat account. Only trades that result in delivery will impact your demat account. In an intraday trade, your net position is zero at the end of the day. Normally, even if you don’t close your intraday position, the broker RMS will close out your intraday position to protect the risk of the account. The chart below explains the intraday trading process in graphic detail.
One common question that traders often ask is whether they need to have a demat account in case they only trade intraday. The answer is yes. SEBI regulations stipulate that in case you trade in equities, it cannot be done without a demat account. It does not matter that you will not take delivery in case of intraday trading. However, due to the possibility that an intraday trade may vest on the trader, it is mandatory to have a demat account even for intraday trading in equities. Of course, if you only activate your F&O account, the demat may not be required. However, with stock futures on select stocks getting into compulsory delivery from August, you will automatically a linked demat account for F&O trading too.