InvestorQ : Do I need a demat account if I only intend to do day trading?
NISHA Nayak made post

Do I need a demat account if I only intend to do day trading?

3 years ago
You are right that intraday trading does not impact the demat account in any way. For example, when you buy shares in the morning and sell the shares before the closing of trade on the same day, then your net position is zero. That means that there is not delivery to be given or received in your case. Similarly, if you sell in the morning and buy back the shares before the end of the same day, then you do not require to impact your demat account in any way as your net position is nil. Under the rolling settlements, any position can be squared off on the same day. If it is not squared off then it will compulsorily result in delivery of shares, either buy or sell.
So do you require a demat account for intraday trading? SEBI regulations stipulate that every equity trading account has to be necessarily mapped to a demat account. That means even if you want to only trade intraday, you will still require a demat account, whether you use it or not. There are two reasons for the same. Firstly, you may get into a position but you may not be able to get out due to lack of liquidity. In such cases, you will require a demat account to take delivery of these shares. Secondly, if you forgot to close out your intraday position and your broker RMS also missed it when it comes into your demat account. That is why SEBI insists that if you want to trade in equities (intraday or delivery) you will require a demat account compulsorily. It is a must. Of course, if you intend to only trade in futures and options, and then a demat account is not required.