InvestorQ : Do I require a demat account to trade in intraday basis only?
Ria Roy made post

Do I require a demat account to trade in intraday basis only?

Answer
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2 years ago


This is an interesting question. Do you need to have a demat account if you only intend to trade intraday? I am sure you are asking this question because intraday trading does not result in any delivery of shares to the investor. Nor does investor have to give delivery of shares. All positions are closed out on the same day. In an intraday trade, you initiate a position during the day and close out during the same day. It could be buy in the morning and sell before the end of the day. It could be selling in the morning and buy it back before the end of the day. Both ways it works. As a result, your net position at the end of the day is zero, which means no delivery is required. That means there is no delivery and hence no role of demat account in intraday trading. Then do you require a demat account? Actually, you do?
There is a catch here! SEBI regulations stipulate that no trade in equity can be done without a demat account. Your intent is immaterial. An intraday trade may not impact your demat account but since it is a trade in equities, you will still require to have a demat account! The reason is that in case you are not able to close your trade due to some factor beyond your control, then you need to have an account where you can take in your trade. That is why a demat account is required in intraday trading also.