Is Intraday Trading possible without a Demat account?

The world of online trading has become increasingly more accessible and convenient for both new and seasoned participants in financial markets. Today, traders and investors can execute and manage trades at lightning fast speeds, at any time, and from anywhere they choose. This revolution in trading as we know it is credited to the advent of modern trading practices, particularly the appearance of online trading and free demat accounts.

In fact, online trading has become so prevalent that an increasing number of people today dabble and even make a living with the high-speed world of intraday trading.

The procedure for opening a demat account and a trading account has become quite convenient. However, these also present their own share of queries. For instance, if you wish to pursue intraday trading, you might wonder if it is necessary to open a demat account online. To answer this as well as other such queries related to the topic, let us take a deep dive into the world of intraday trading.

The World of Intraday Trading

For most traders, dealing in the financial market is typically viewed from two perspectives. This is especially true in the case of share markets. The first of these perspectives is long term investment, wherein you buy the stocks of a company hoping to profit from its growth. The stocks are held for a considerable amount of time and then sold off at an opportune time.

The other is short term trading, which can further be narrowed down to intraday trading . In this case, stocks are bought and sold within the same day. This is because they are purchased not for long term appreciation, but to make profits from the stocks’ price fluctuations. Online trading is therefore crucial in the world of intraday trading since the market has to be constantly tracked and decisions have to be made quickly and at opportune times.

Intraday Trading without Demat Account

For any type of transactions in securities, it is vital for you to have a trading account. This is because it is the trading account that allows you to facilitate the purchase and sale of your securities on the relevant exchange. In the case of intraday trading, a significant portion of the trading is done in futures and options contracts.

All that is required for such transactions is cash and the need for delivery of the shares does not arise. Therefore, a trading account is generally enough for such transactions and you may not need to open a demat account online

However, keep in mind that a trading account cannot hold securities. This function is only served by opening a demat account online. Much like a bank account holds your money, demat accounts are essential to hold the securities you purchase over a period of time. You must, therefore, follow the procedure for opening a demat account if you want to invest in stocks and trade in equities.

Benefits of Demat Accounts

Hence, whether or not you need to open a demat account online depends on the type of trades you typically execute. For traders looking for long term investment in equities, opening a demat account is essential. However, for those looking to conduct intraday trading in futures and options, demat accounts might not be essential.

However, even if it is not essential to your everyday trading, opening a demat account online with your trading account can offer several benefits, such as safety, accessibility and security of your shares. In fact, when you sign up with a depository participant such as IIFL, you can open a free demat account with your trading account.

How to Open a Trading and Demat Account

If you wish to know the procedure of opening a demat account along with your trading account , here are the simple steps you can follow:

  • Visit the website of your choice of Depository Participant (DP).
  • On the website of the DP, search for and select the ‘open a demat and trading account’ option.
  • Next, fill out the account opening application with all essential and updated information.
  • Upload scanned copies of required KYC documents such as PAN card, proof of identity etc.
  • Go through the official agreement presented by the DP and if found satisfactory, sign the document by affixing your signature.
  • Once all the relevant documents are submitted, your application will be processed by the DP.


Whether you are looking to join the growing number of India’s intraday traders or to start investing long term in the market’s movement, you need the right company to get you started. To that end, consider opening a free demat account demat as well as a trading account with IIFL where you can get an all-in-one account and trade in multiple securities online.

Open Demat Account at IIFL