Part 10 - From Scalping to Delivery: Every Stock Market Trading Style Explained
How to Trade in Indian Markets: 21 Styles Explained with Simple Examples
21 Trading Methods with Simple Examples
1. Intraday Trading
Buy and sell the same day.
Example: Buy Tata Motors at ₹900, sell at ₹910.
Profit: ₹10 x 100 shares = ₹1,000
Loss (if price drops): ₹10 x 100 = ₹1,000
2. Scalping
Buy and sell quickly for tiny gains.
Example: Buy Bank Nifty Option at ₹100, sell at ₹102 in 1 minute.
Profit: ₹2 x 200 qty = ₹400
Loss: If it drops to ₹98, loss = ₹400
3-Swing Trading
Hold 2–10 days to catch a trend.
Example: Buy Infosys at ₹1,500, sell after 5 days at ₹1,570.
Profit: ₹70 x 50 = ₹3,500
Loss: Drops to ₹1,440 = ₹3,000 loss
4. BTST (Buy Today Sell Tomorrow)
Buy today, sell next day.
Example: Buy HDFC Bank at ₹1,600, next day it opens at ₹1,630.
Profit: ₹30 x 20 = ₹600
Loss: If opens at ₹1,580 = ₹400 loss
5. STBT (Sell Today Buy Tomorrow)
Short-sell futures today, buy back next day.
Example: Sell Reliance Futures at ₹2,800, buy next day at ₹2,750.
Profit: ₹50 x 250 = ₹12,500
Loss: Price rises to ₹2,850 = ₹12,500 loss
6. Positional Trading
Hold for weeks/months.
Example: Buy IRCTC at ₹1,100, hold for 2 months, sell at ₹1,350.
Profit: ₹250 x 100 = ₹25,000
Loss: If falls to ₹950 = ₹15,000 loss
7.Delivery Investing
Buy and hold long-term.
Example: Buy TCS at ₹3,200 and sell 1 year later at ₹4,000.
Profit: ₹800 x 10 = ₹8,000
Loss: If price falls to ₹2,800 = ₹4,000 loss
8. Options Buying
Buy call or put for a directional move.
Example: Buy Nifty 22,000 Call at ₹100, it moves to ₹160.
Profit: ₹60 x 50 = ₹3,000
Loss: If expires worthless = ₹5,000 total loss
9. Options Selling
Sell options and earn premium.
Example: Sell Bank Nifty 49,000 Call at ₹150, expires at ₹0.
Profit: ₹150 x 25 = ₹3,750
Loss: If it rises sharply to ₹300 = ₹3,750 loss
10. Option Spreads
Limited risk/limited profit strategies.
Example: Bull Call Spread: Buy 22,000 CE at ₹100, sell 22,200 CE at ₹40.
Max Profit: ₹60 x 50 = ₹3,000
Max Loss: ₹100 - ₹40 = ₹60 x 50 = ₹3,000
11. Hedging
Protect portfolio from loss.
Example: Buy Tata Steel at ₹130, also buy Put at ₹125.
If price drops to ₹115 → Stock loss covered by put profit.
Cost of protection = ₹3 x 100 = ₹300 (if not used)
12. Arbitrage
Risk-free profit from price difference.
Example: Buy TCS in cash at ₹3,250, sell in futures at ₹3,270.
Profit: ₹20 x 75 = ₹1,500
Loss: None if both settled together, but costs (tax/brokerage)
13. Algorithmic Trading
Computer executes strategy.
Example: Algo buys every time RSI crosses 30 and sells at 60.
Profits from fast reactions (even ₹1–2 moves per trade)
Loss if wrong logic or slippage
14-Quantitative / Statistical Trading
Mathematical model–based trades.
Example: Buy when price is 2% below 20-day average.
Entry at ₹98, exit at ₹102 = ₹4 profit
Missed trend → ₹5 loss per trade
15. Momentum Trading
Buy fast-moving stocks.
Example: Stock jumps from ₹200 to ₹215 after news.
Buy at ₹205, sell at ₹213 = ₹8 x 100 = ₹800
Reverses fast → ₹500–₹1,000 loss
16. News-Based Trading
Trade on results or events.
Example: Positive earnings → buy Infosys at ₹1,600, sell at ₹1,680.
Profit: ₹80 x 50 = ₹4,000
Bad news = ₹70 fall = ₹3,500 loss
17. Event-Based / Seasonal Trading
Special days like budget, RBI policy.
Example: Buy Nifty options before budget – move from ₹120 to ₹200.
Profit = ₹80 x 50 = ₹4,000
Budget disappoints → option falls to ₹60 = ₹3,000 loss
18. Expiry Day Trading
Last day of weekly/monthly options.
Example: Buy BNF 49,000 CE at ₹20 at 2:45 PM, it hits ₹80 at 3:20 PM.
Profit: ₹60 x 25 = ₹1,500
Loss: Goes to ₹0 = ₹500 loss (max)
19. Index Arbitrage / Basket Trading
Buy or sell index + constituent stocks.
Example: Bank Nifty rising faster than banks – short Bank Nifty, long ICICI/AXIS.
Profit on convergence = ₹2,000+
Loss if divergence widens
20. SLBM (Stock Lending and Borrowing)
Borrow stocks to short sell.
Example: Borrow HDFC, sell at ₹2,700, buy back at ₹2,500.
Profit = ₹200 x 100 = ₹20,000
Loss: If rises to ₹2,800 = ₹10,000 loss
21. Commodity Spread Trading
Trade difference between two commodities.
Example: Long Crude Mini, short Brent → Crude gains more.
Spread widens = ₹3,000 profit
Spread narrows = ₹3,000 loss
Summary Table of Methods vs Instruments:
