Types of Trade, and How an Order Actually Becomes a Trade

Two ways to hold a trade

Intraday (MIS) means buying and selling the same shares within a single trading day — the position is squared off before the market closes, you never actually take delivery, and brokers typically extend extra leverage for it since the exposure doesn't carry overnight risk.

Delivery (CNC — "Cash and Carry") means paying the full price upfront. The shares are credited to your demat account and you own them for as long as you like — a day, a year, a decade — until you decide to sell.

Two market segments

The cash/equity market is where the shares themselves change hands — what Modules 1 through 3 have been describing. The derivatives market (often shortened to "F&O," for futures and options) trades something one level removed: a contract whose value is derived from a share or index price, without ever requiring you to own the underlying share.

Futures: an obligation

A futures contract is an agreement, made today, to buy or sell a fixed quantity at a fixed price on a specific future date. Only a margin — a fraction of the contract's full value — is required upfront, which is what makes futures leveraged. But the obligation itself doesn't shrink to match that smaller upfront cost: both the potential gain and the potential loss are calculated on the full contract value, amplified relative to the capital actually put down.

Options: a right, not an obligation

An options contract gives the buyer a choice, not a commitment. A Call option is the right to buy at a set price (the "strike price"); a Put option is the right to sell. The buyer pays a small, upfront premium for that right and can simply let it expire worthless if the trade doesn't work out — the premium is their entire, capped downside. The seller of the option takes the opposite, much larger obligation in exchange for collecting that premium, which is why option-selling requires significantly more margin than option-buying. Options trade in fixed lot sizes and expire on set dates — weekly or monthly, depending on the contract.

The order-to-settlement pipeline

Almost nothing explains what actually happens between tapping "Buy" and a share showing up in your account. It's a short, mechanical chain:

1. You place an order in your broker's app, specifying the stock, quantity, and order type.
2. The broker routes it to the exchange's order book (NSE or BSE), where it's matched against someone else's opposite order.
3. Once matched, the trade is confirmed the same day ("T day").
4. The Clearing Corporation steps in as counterparty to every trade on the exchange, netting out exactly who owes what to whom.
5. By the next trading morning ("T+1"), the Depository (NSDL or CDSL) executes the actual transfer — shares into the buyer's demat account, funds into the seller's bank account.

Notice what doesn't appear anywhere in that chain: a guarantee. Every step describes a mechanism, not an outcome — nothing about how an order gets matched and settled says anything about whether the price you got was a good one. That judgment is what the rest of MintStreet's dispatches, and practicing on the Practice Sheets page, are for.