How to Do Intraday Trading in Zerodha (in 5 Easy Steps)

I have been using Zerodha for my trading for more than 4 years. One thing that I like most about the Zerodha platform is its user-friendly design.

Throughout my journey, I’ve never encountered any technical issues while trading on the Zerodha platform.

In this article, I share my experience starting intraday trading on Zerodha’s Kite platform in 5 easy steps.

Before that, let’s first discuss some essential factors, such as market depth, volatility, and order types, that you must know before starting trading.

Market depth guides us about the liquidity of a stock. Liquidity is how much buying and selling is happening in the market for that particular stock. 

Volatility is the number of ups and downs in the market. Experienced traders like trading stocks with more than 2% volatility.

For example, if you pick HDFC stock for trading, you would see that its volatility is around 0.50%, which makes it a less popular stock for traders. But on the other hand, the market depth of HDFC is really good.

When you buy a stock, you have two options – CNC and MIS. You can select CNC in the order type, which means Cash -n- Carry, and the shares you buy are delivered to your demat account.

But in trading, you have to select MIS, i.e., Margin Intraday Square off, which means your position will be open for that trading day only, and you have to close your position (either long or short) before the market closes; otherwise it will be automatically squared off when the market closes. 

An intraday order is called Position. A long position is a trading style in which you buy the shares first and then sell them later to make a profit. 

Selling stocks first and buying later is called shorting or short position. Short selling works on the same principle of buying at low and selling at high, but the process is reversed. Short selling works when the stock price falls, and you can still book the profit from the falling price.

Let’s start our step-by-step guide to intraday trading in Zerodha without further discussion. We’ll also discuss different intraday order types available in Zerodha, including Iceberg order, which is a new concept in the later part of this article. 

5 Steps to Do Intraday Trading in Zerodha

Step – 1. Login to Zerodha Kite

Open the Zerodha Kite portal in the web browser and log in with your user credentials. You’ll be asked to enter an “App code” from your smartphone’s Kite app for authentication.

App code zerodha

You can find your app code option by clicking on your Zerodha account ID at the bottom right of the Kite app.

Step – 2.  Add Funds 

You can add funds by going to the fund section (from the top menu), clicking on “Add funds”, entering the amount, and then selecting one option from UPI or Netbanking. 

add funds zerodha

UPI funds transfer is totally free while transferring funds from net banking will cost you Rs. 9+GST. Let’s say you opt for UPI and enter your UPI id in the box and click on “Continue”.

Open the UPI app (like Gpay or PhonePe) with your UPI ID and complete the transaction.

Step 3 – Shortlist the Stocks in the Watchlist

Search for the stocks you want to trade in, and you can add them to the watchlist to avoid searching every time you trade. You can make multiple watchlists for different stocks or other assets. 

For example, I was searching for HDFC stock, and I got a list of all HDFC stocks on the exchange.

search zerodha stocks

Step 4 – Observe Market Trend

Open the chart and try to observe the market trend. You can open the chart while hovering the mouse cursor over the stock name and see the option below.

HDFC stock in zerodha

You can also check the market depth and technicals from the available options.

Charts and market depth would help you decide whether you will take a long or short position. I’ll execute a long position in the next step to keep things simple.

Hdfc chart

Step 5 – Place Order

Select the MIS (Intraday) and “Market” options to place the order to open a buy position for you. (See the snapshot below). (I’ll explain the market order option in the next section.)

Market Order Zerodha

Once your buy position is completed, you will have to wait for the stock’s price to reach your desired price point so that you can exit the position and book the profit.

How to exit a position in Zerodha

Retake the above example; suppose your HDFC stock has crossed the Rs. 2600 mark, and now you are willing to book the profit. Follow the steps below.

  • Go to the “Positions” section
  • Hover the mouse over the stock name to see the “3-dot” menu. Click on that menu.
  • Now click on “Exit”
  • A “Sell” window will appear, now enter the number of stocks, select “Market” and click on “Sell”.
Hdfc exit postion

Let’s discuss some more advanced options in intraday order types in Zerodha.

Intraday Order Types in Zerodha

#1. Market Order

In a market order, your order is executed at the current market price at the time it is placed. You cannot change the ordering price to your desired price, as you only get the order at the market price.

For example, if you want to trade in HDFC stock, which is trading at Rs. 2,584.95, if you choose the “Market” option in the order window, you’ll be able to buy shares at Rs. 2584.95 or whatever the market price is when you complete your order.

Market Order Zerodha

#2. Limit Order

A limit order allows you to decide the price at which you place your order. You can add your target price. The order will be executed when the stock price meets your condition or price better than your limit price. 

For example, if HDFC share is trading at Rs. 2584.95 but you think the share price will fall to Rs. 2500. You can set a limit price at Rs. 2500, then the order will only be executed when the HDFC shares will reach the Rs. 2500 price point.

A limit order has two options: a Stop-Loss Limit order (SL) and a Stop-Loss Market order (SL-M).

I. Stop Loss Limit Order

Stop Loss is an option that allows you to set a minimum price, your order will be executed at that price in any case, if your share price falls below the trigger price. Stop Loss works in both long and short positions.

  • If you have a buying position, then you will hold a sell Stop Loss
  • If you have a selling position, then you will hold a buy-stop Loss

For instance, again, taking the same HDFC stock. If you have already bought HDFC shares at Rs. 2580 in the morning and have placed a selling order and put the limit price at Rs. 2600 and put a stop loss at Rs. 2590 (see snapshot). 

That means your order will be triggered when the share price reaches Rs. 2590 but it will only be executed when it reaches the limit price that is Rs. 2600 or better, otherwise, it will remain active in the system if the limit price condition is not met.

Stop Loss Order Zerodha

II. Stop Loss Market Order

A stop-loss-market order allows you to set a trigger price. When the stock price reaches near the market’s current best available price, your shares will be sold off at that price.

For example, if you set the Stop Loss Market Order Trigger’s price at Rs. 2490, your order will be placed when the market price reaches Rs. 2493 or 2492 or any price near your trigger price.

Stop Loss Market Order Zerodha

#3. IceBurg Order

Iceberg is an order type that divides larger orders (or values) into smaller orders, and each small order is sent for execution to the exchange once the previous order has been executed.

An Iceberg order lowers the impact cost and hides large orders in market-depth bids and offers. It is valid for both market and limit orders. Each small order is called a leg in Iceberg. You can decide how many legs you want to divide a big order into.

Iceburg Order Zerodha

Impact cost is the difference between the actual traded price and the visible stock price (or asset price) at the time the order was placed. For example, if you placed a market order to buy 2000 shares at a trading price of Rs. 100, but the actual execution price was Rs. 100.30, the impact cost for the order would be Rs. 0.30 x 2000 = Rs. 600.

The impact cost rises in proportion to the size of the order. Traders with large quantities lose far more money to impact costs than to all other charges. Other charges could be brokerage, STT, and exchange transaction charges. You can review the list of zero brokerage trading accounts in India that offer cheap brokerage charges on intraday trading.

The iceberg option reduces the impact cost by placing multiple small consecutive orders of a big quantity order. 

#4. Cover Order (CO) in Zerodha

A cover order comes with an in-built risk mitigation feature because it allows you to place two orders for the same stock at a time. These two orders are –

  • Market order
  • Stop loss-limit order

Cover orders have a default risk mitigation feature (a compulsory stop loss) that comes in handy for traders who use leverage in their trading. A stop loss reduces the risk of losing all the money.

  • Buy Cover Order – Remember that when you place a ‘buy cover order’, your limit price must exceed your stop-loss trigger price. 
  • Sell Cover Order – When you place a ‘sell cover order’, your limit price must be less than your stop-loss trigger price. 

While placing a CO, the stop loss trigger price is allowed to be within a 10% range. Watch the quick video below to understand how to place a Cover Order in Zerodha.

Zerodha Cover Order

#5. After Market Order (AMO)

You can go for After Market Order (AMO) if you have missed trading within market hours. When you place an AMO, your order will be placed the next day as soon as the market opens. 

You can place AMOs between the timings mentioned below –

  • NSE – 3:45 PM to 8:57 AM
  • BSE – 3:45 PM to 8:59 AM

The Bottom Line

Now you know how to do intraday trading in Zerodha, but you must enhance your technical skills like using indicators, building trading strategies, and similar skills to be better at intraday trading. 

About Rajan Dhawan

Rajan has covered personal finance and investing for over 5 years. Previously, he was in the IT field for 8 years after completing his MCA but his deep interest in personal finance led him to become an investing expert. He is passionate about investing, stocks, startups, and cryptos.

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