What Is Delivery Trading vs Intraday? CNC and MIS Explained

Delivery trading vs intraday comes down to one toggle on your order screen: CNC or MIS. Delivery (CNC) means you pay in full and the shares sit in your demat from the next day, to hold as long as you want. Intraday (MIS) means you open and close the same position the same day, on margin.

That single choice changes how much cash you need, how much leverage you get, when the trade settles, and whether the broker closes it for you at the end of the day. Beginners often tap the wrong code and get a nasty surprise — a position auto-squared at a loss, or cash blocked they did not expect. If you want this foundation built properly rather than pieced together from scattered videos, a structured stock market training course makes these mechanics second nature before you risk real money.

What exactly do CNC (delivery) and MIS (intraday) mean on your screen?

Every time you place an equity order, your broking app asks for a product type. The two you will use most are CNC and MIS. These are the names on Zerodha's Kite platform; other brokers label the same ideas as "Delivery" and "Intraday", or "Cash" and "Margin". The words differ, the mechanics do not.

CNC stands for Cash N Carry. It is the delivery product. You are telling the broker: take the full money from my account, buy these shares, and deliver them into my demat account. Once they arrive, they are yours. You can sell them tomorrow, next month, or in ten years. There is no clock running against you.

MIS stands for Margin Intraday Square-off. It is the intraday product. You are telling the broker: lend me extra buying power for today only, and understand that I will close this position before the market shuts. Nothing enters your demat account. The position is a bet on the price moving during the day, not an ownership of the company.

That is the heart of delivery trading vs intraday: one is ownership you carry forward, the other is a same-day position on margin. Everything else — the cash required, the leverage, the settlement timeline, the auto-square-off — flows from that difference.

Why do brokers separate the two at all? Because the risk they take on is completely different. When you hold shares overnight in delivery, the broker is not exposed — you have paid in full and the shares are yours. When you trade intraday on margin, the broker is effectively lending you money for the day, so it must get that exposure off the books before the market closes. The auto-square-off is not a punishment; it is how the broker protects itself from carrying your leveraged bet into tomorrow, when a gap-down could leave you unable to pay. Understanding that logic makes every rule that follows — the 20% margin, the 3:20 PM clock, the per-order fee — feel less like fine print and more like common sense.

How do margin and leverage differ between delivery and intraday?

This is where most of the real-money difference lives. In a delivery (CNC) trade there is no leverage at all. If you want to buy shares worth ₹50,000, you need ₹50,000 in your account. You are carrying the position overnight, so the broker will not fund it for you. Simple, and safe by design.

Intraday (MIS) is the opposite. Because the position closes the same day, the broker is willing to lend you buying power. Under SEBI's peak-margin regime the leverage on eligible equity intraday is capped at roughly 5x — meaning you post about 20% of the trade value and control the rest for the day. So the same ₹50,000 of margin could control close to ₹2,50,000 of stock intraday.

That sounds attractive until you remember leverage cuts both ways. A 2% move in your favour on a 5x position is roughly a 10% gain on your margin; a 2% move against you is roughly a 10% loss. The same force that magnifies gains magnifies losses, which is exactly why intraday demands tighter discipline. We cover this risk-control layer in our guide to stop loss vs trailing stop loss.

It is worth knowing how that 5x cap came to be. Before SEBI's peak-margin rules, some brokers offered 10x, 20x, even higher intraday leverage. SEBI now requires the full upfront margin (VaR plus ELM) to be available at all times, and checks compliance through four random snapshots during the trading day, with penalties on both broker and client for any shortfall. The practical effect: intraday leverage today is far lower and far more uniform across brokers than the "unlimited margin" era many old blog posts still describe.

What happens after you buy — T+1 settlement vs the 3:20 PM auto-square-off?

The timeline is the clearest way to feel the difference. A delivery trade and an intraday trade follow completely different clocks after you hit "buy".

Delivery (CNC): You buy today. The trade settles on a T+1 basis, so the shares are credited to your demat account the next working day. From there, nothing forces your hand. You hold for as long as your plan says — a swing of a few days, or a multi-year investment. This is the mode that lets compounding work; see why in our piece on the power of compounding.

Intraday (MIS): You buy and must sell the same day (or sell-then-buy for a short). If you do not close the position yourself, the broker's system closes it for you near the end of the session — on Zerodha, open equity MIS positions are auto-squared off around 3:20 PM, and the broker charges an auto-square-off fee (Zerodha charges ₹50 per executed order for system square-offs). Nothing is ever delivered to your demat; the position simply nets out as a profit or loss in cash.

Which should you use, delivery or intraday?

There is no universally "better" code — only the right code for the trade you are actually making. The honest test is your intent and your holding period. If you want to own the business and let it grow, you want delivery. If you are trading a short-term price move and want it off your book by the close, you want intraday. The table below lays the two side by side.

Notice what the table is really telling you: delivery is slower and cash-heavy but forgiving, while intraday is capital-light but unforgiving of inattention. The leverage that makes intraday appealing is the same thing that makes it risky, and the auto-square-off removes the option to "wait and hope" that delivery gives you. A different question — whether to hold for minutes, days, or weeks — is covered in our guide to intraday vs positional vs swing trading styles.

What mistakes trip up beginners with CNC and MIS?

Most product-code accidents are avoidable once you know where they hide. These are the ones that cost new traders the most:

• Buying in MIS "to save money", then wanting to hold. If the stock falls, you cannot simply keep it — MIS will be squared off at the close, crystallising the loss. If you wanted to own it, the trade should have been CNC from the start. Some apps let you convert the position to CNC, but only if you have the full cash; many beginners do not.
• Forgetting the auto-square-off clock. Walking away from an open MIS position means the broker closes it for you near 3:20 PM, at whatever price the market offers, plus a square-off fee. The market, not your plan, decides your exit.
• Treating intraday leverage as free money. Controlling ₹2,50,000 of stock with ₹50,000 feels powerful until a small adverse move wipes a large chunk of your margin. Position sizing matters more on MIS, not less.
• Choosing intraday to dodge delivery charges. Many discount brokers charge little or nothing on delivery and a flat fee per intraday order, so "intraday is cheaper" is often false once you add the square-off and the higher churn. Always read your broker's actual tariff.
• Picking the wrong order type on top of the wrong product. Product code (CNC/MIS) and order type (market/limit/SL) are separate choices — get both right. We break the second one down in market order vs limit order vs SL order.

What to do next

Delivery trading vs intraday is not a contest to win; it is a toggle to use deliberately. Decide the trade first — am I owning this, or am I playing a same-day move? — and the product code follows automatically. Delivery (CNC) when you intend to hold and can fund the full amount; intraday (MIS) when you will watch the position and close it before the bell. Get that habit right and you will never be surprised by an auto-square-off or a blocked balance again.

If you are starting out, build the muscle in delivery first. It is slower, fully funded, and forgiving — the ideal place to learn how orders, settlement and your own psychology behave before leverage enters the picture. Add intraday only once you can state your stop-loss and position size out loud before every trade.

Frequently Asked Questions

Is delivery or intraday better for beginners?

For most beginners, delivery (CNC) is the safer starting point. It uses no leverage, gives you shares you actually own, and never forces an exit, so you can learn how markets and your own decisions behave without a 3:20 PM clock or magnified losses. Intraday suits experienced traders who can monitor positions and manage tight risk.

Can I convert an intraday (MIS) position to delivery (CNC)?

Usually yes, most platforms offer a "convert position" option from MIS to CNC during market hours — but only if you have the full cash for the trade value, because delivery needs 100% funding. If you lack the balance, you cannot convert, and the MIS position will be squared off at the close.

What happens if I don't sell my intraday position before close?

The broker's system squares it off for you near the end of the session — on many brokers around 3:20 PM for equity — at the prevailing market price, and typically charges an auto-square-off fee per order. You lose control of the exit price, so it is always better to close MIS positions yourself.

Does delivery trading give any leverage?

No. Delivery (CNC) requires 100% of the trade value upfront because you are carrying the shares beyond the day. Leverage on cash equity is available only for intraday (MIS), and even there SEBI's peak-margin rules cap it at roughly 5x for eligible stocks.

Are CNC and MIS the same on every broker?

The names CNC and MIS are specific to Zerodha's Kite, but the concepts are universal. Other brokers label them "Delivery" and "Intraday", or "Cash" and "Margin". Whatever the label, delivery means full payment and ownership carried forward, while intraday means a margin position that must close the same day.

Disclaimer: This article is for educational purposes only and does not constitute investment advice. Markets carry risk — please do your own research or consult a qualified financial professional before investing. NIFM provides training and exam preparation; certification exams conducted by regulatory or professional bodies are administered by those bodies independently.