Investors find gain in day trading

NAGPUR: Day trading seems to be the order of the day in a falling markets. There has been a sporadic rise in the quantum of speculative transactions at the brokers terminals on account of the tailspin at the bourses. This is due to investors who traditionally relied on delivery-based deals are now turning to day trading.
Day trading is a speculative transaction in which the deal is squared off on the same day and without blocking funds.
With a chunk of wealth being washed away, the investors who would, earlier, enter into the purely delivery-based transactions are now finding speculation through day trading safer.
This is mainly due to lack of liquidity, preventing the investors from buying stocks on delivery. Most of the investors are taking short positions so as to capitalise on the bear phase, say brokers.
This is for the first time in recent years that this category has shifted to speculation, say brokers. Sunil Jogi of JRG Capital says the proportion of day trading has gone up by 30% to 40% at this firm's terminal in the city.
Although there are some investors who have purchased scrips for a longer term and are refraining from such practice, there are others who believe that day trading may be profitable. Brokers too are strictly monitoring the transactions so as to prevent any payment default due to losses. The investors are trying to eke out whatever little they can. Their funds have been exhausted. A very few of those who were regular day traders are operational these days as the bear phase has wiped out many of them. Now those who would otherwise take deliveries are resorting to day trading, mentioned G V Iyer of Apex Investments.
At times, the firms which are otherwise idle due to the slump prompt their clients to at least day trade so as to keep the show running, added a source in the broking circles.
Hiten Vyaas of Kantilal Chaganlal Securities adds though the number of speculators has gone up, the volume in money terms is rather low.
"Normally this category of players or investors would not prefer a delivery-based deal, rather than speculation. Earlier, even a delivery-based deal would earn a substantial profit in a week or a fortnight after which they would liquidate their holding to buy a fresh stock. However, this has become risky these days", he further said.