Day Trading Where Angels Fear To Tread

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: Arvind Mahapatra, a former government employee, surfs the waves created by stock prices. Bijal Mehta, a housewife, puts her business degree to use by taking a view on the market and taking daily to close out in the evening. Prakash Kewaldamani, owner of a general store, has an online terminal and opens the day with a list of target stocks to buy.

This is the new creed on the market – the day trader. While the going is good and the markets are booming, this creed is bound to grow. As the markets roll and pitch, new entrants to the day trading community will start feeling the heat.

It was in the month of July 1999, in the city of Atlanta, that Mark Barton, a chemist turned day-trader, shot dead nine people after a depressing day of trading. This he had done after he had already had killed his wife and two children with blows from a hammer as they slept. Many investors are not aware of the seamier side of day trading.

The Growing Creed

Day-trading and online trading are distinct in the sense that online traders can be long term investors who place their orders through the online trading mechanism. They then hold the stock and sell it another day to book profits. The goal of a day trader is to capitalise on price movements within one trading day.

A decade ago, this creed was present in small numbers at metro locations, primarily Mumbai. The profile included people who were in the know and did not have enough capital to become full-time brokers. The trend is now changing. “We observe day trading been taken on by investors in the 40-plus age bracket, as they have both the cash and time with them", says Ashish Maheshwari, director of Arihant Capital Markets.

Most of these investors spend their whole day in brokerage houses taking tips, and gradually getting entangled in the vicious circle of fear and greed.

He further adds, "Around 60% of our total volume comes from day trading. With the advent of online facilities, the day trading practice has increased.”