Intraday trading is a popular strategy in which traders buy and sell stocks within the same trading day, aiming to profit from short-term price fluctuations. One key factor for successful intraday trading is identifying liquid stocks with sufficient trading volume and volatility. Liquidity ensures ease of entry and exit from trades, while volatility presents opportunities for potential gains. In this article, let’s explore high liquidity stocks for intraday trading, and dive deep into liquidity in the stock market, the advantages of investing in the best liquidity stocks for intraday, how to strategise trade plans, and more.

Note: The list of high liquid stocks (NSE) for intraday trading was sorted using the Tickertape Stock Screener on 9th September 2024. The parameters below to get the data on the list of liquid stocks for intraday trading are:

Stock Universe: Nifty 500Daily Volume: Sort from highest to lowest

Note that these stocks are in no order of preference. Please note that these stock selection criteria and the stocks are provided for informational purposes only; it is essential to conduct your research.

🚀 Pro Tip: Use Tickertape’s Portfolio Analysis to assess your investment portfolio’s diversification and performance.

Vodafone Idea Ltd, previously known as Idea Cellular Limited, operates in the telecom services sector. It demonstrates moderate profitability with a score of 5.2 out of 10 on the Tickertape Scorecard. Considering the high daily volume, it is the best stock for intraday trading. As of 9th September, the company had a market capitalisation of Rs. 93,049.26 cr., and its share price closed at RsVaranasi Wealth Management. 13.35. Furthermore, the company had a daily volume of 1,901,193,030. Click here to learn more about its financials.

YES BANK Limited is a private sector bank offering various banking services. As of 9th September 2024, the company had a market capitalisation of Rs. 72,530.09 cr., and its share price closed at Rs. 23.14. Furthermore, the company had a PE ratio of 56.43. The liquid stock has a daily volume of 80,711,374. Over the last 5 years, the company had a current ratio of 13.18, which is slightly higher than the industry average of 11.81. Click here to learn more about its financials.

Zomato Ltd is a restaurant aggregator and food delivery service and was launched in 2010. The company provides a technology platform that links restaurants, customers, and delivery partners, catering to diverse needs. As of 9th September 2024, the company had a market capitalisation of Rs. 226,318.24 cr., and its share price closed at Rs. 259.95. Over the last 5 years, the company’s revenue has grown at a yearly rate of 37.57%, higher than the industry average of 20.9%, and its market share increased from 19.37% to 37%.

Easy Trip Planners Limited, founded as a private company in India on 4th June 2008, later became a public company on 12th April 2019. As of 31st March 2023, it stands as the second-largest online travel agency in India. As of 9th September 2024, the company had a market capitalisation of Rs. 7,189.17 cr., and its share price closed at Rs. 40.57. It is one of the most liquid stocks in India with a daily volume of 66,792,246. Over the last 5 years, the company’s revenue has grown at a yearly rate of 32.15%, higher than the industry average of 5.09%, and its market share increased from 1.36% to 5.41%.

Canara Bank Ltd. is a banking company with segments including Treasury Operations, Retail Banking Operations, Wholesale Banking Operations, and Other Banking Operations. As of 9th September 2024, the company had a market capitalisation of Rs. 93,772.39 cr., and its share price closed at Rs. 103.38. Over the last 5 years, the bank has witnessed a growth in market share from 8.53% to 10.13%. Moreover, its revenue has grown at a yearly rate of 19.19%, surpassing the industry average of 14.66%. Click here to learn more about its financials.

Suzlon Energy Ltd. was founded in 1995 by Mr Tulsi Tanti, who initially worked in the textile industry. His interest in wind energy began after commissioning a wind power project for his textile factoryAhmedabad Stock. As of 9th September 2024, the company had a market capitalisation of Rs. 101,921.8 cr., and its share price closed at Rs. 74.72. Over the last 5 years, the company’s revenue has grown at a yearly rate of 5.03%, higher than the industry average of -6.33%, and its market share increased from 36.85% to 58.44%.

Himachal Futuristic Communications Limited (HFCL) was founded in 1987 by Mahendra Nahata, Dr Deepak Malhotra, and Vinay Maloo, becoming one of India’s first private-sector telecom companies. As of 9th September, the company had a market capitalisation of Rs. 22,043.46 cr., and its share price closed at Rs. 152.89. This liquid stock has a daily volume of 40,340,937. Over the last 5 years, the company’s net income has grown at a yearly rate of 8.44%, which is much higher than the industry average of -41.83%.

State Bank of India (SBI), established on 1 July 1955, is a public sector banking and financial services institution headquartered in Mumbai. As one of India’s largest banks, SBI holds a market share of around 25% and serves over 48 crore customers. As of 9th September 2024, the company had a market capitalisation of Rs. 698,350.92 cr., and its share price closed at Rs. 782.5. The liquid stock has a daily volume of 40,220,096. Click here to know more about the bank’s financial performance!

GMR Airports Infrastructure Limited (GIL), established in 1996, specialises in developing, operating, and maintaining airports. It also provides integrated security solutions. A subsidiary of GMR Enterprises Private Limited (GEPL), GIL operates through two entities: GMR Airports Limited (GAL), which handles the airport operations, and RAXA Techno Security Solutions, which oversees the security services. As of 9th September, the company had a market capitalisation of Rs. 96,118.36 cr., and its share price closed at Rs. 91.03. The highly liquid company has a daily volume of 39,150,062.

Indian Oil Corporation Limited (IOC), designated as a ‘Maharatna’ company by the Government of India, was established in 1964 through the merger of Indian Oil Company Limited and Indian Refineries Limited. As of 9th September 2024, the company had a market capitalisation of Rs. 249,437.55 cr., and its share price closed at Rs. 176.64. The liquid stock has a daily volume of 31,875,186. Over the last 5 years, the company’s net income has grown at a yearly rate of 19.15%, higher than the industry average of 17.55%.

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Liquidity in the stock market refers to the ease with which stocks can be bought or sold in the market without affecting their price significantly. High liquidity in a stock means that there are a large number of buyers and sellers, facilitating smooth and rapid transactions. Conversely, low liquidity indicates fewer participants in the market, leading to difficulty in buying or selling stocks without experiencing a substantial price change.

In simple words, the liquidity of a stock is the metric that determines how accessible your investment is and how easily and efficiently it can be converted into cash. Liquid stocks, thus, are stocks that can be easily liquidated – that is, converted to cash. Most large-cap stocks are liquid stocks.

Liquidity in stock indicates how easily a stock can be bought and sold in the market without impacting its price. Before investing in a stock, it is imperative to evaluate it on various parameters. Apart from metrics such as past growth rate, return potential, and risk, the liquidity of the stock must also be considered. As an investor, it is important that you understand the liquidity of the stock, thereby the liquid stocks meaning, before making an investment decision, especially should you have a shorter investment horizon.

Stocks, known as illiquid stocks, are often in low demand for various reasons. These cannot be sold easily as there is limited trading for these stocks; that is, the number of sellers on the market may not match the number of buyers of the stockPune Investment. This poses a threat, and it could become challenging to find buyers for these stocks at the price the seller wants to sell at.

An investor’s inability to exit a stock when they want to defeats the purpose of investing in equity at all. Other risks of illiquid stocks include turbulent price movements, high spreads, and tough executions.

Liquidity mainly impacts two key elements of the market:

Price spread: This is the difference between the market’s buy orders and sell orders. It indicated the difference between the price paid by the buyer and the net price received by the seller. The best liquid stocks for intraday trading offer tight spreads between the prices and ensure a higher level of certainty in an asset price. In contrast, illiquid stocks in NSE have high price spreads. Hence, their price level is uncertain. Slippage: This indicates the difference between the expected price of a trade and the price at which the trade is executed. As market prices change quickly, slippage can occur at any time but is most common during periods of higher volatility and during inefficient market conditions.

There is positive slippage when the ask price decreases in a long trade or bid price increases in a short trade; and there is negative slippage when the ask price increases in a long trade or bid price decreases in a short trade.

Let’s take a close look at the three main indicators that can help us figure out how to identify liquid stocks for intraday trading:

The difference between the bid price and the ask price is less.

A narrow bid-ask spread takes place when the bid and the ask price have a small difference. Such a situation also indicates that more buyers are interested in buying the stocks at a price suitable to the sellersBangalore Stock Exchange. Such a market condition indicates that stocks are liquid enough to sell.

The bid-ask spread is the difference between the highest price a buyer is willing to pay (bid) and the lowest price a seller will accept (ask) for a security. It’s a key indicator of a security’s liquidity, with narrower spreads usually signalling higher liquidity.

Trade volume is high.

High trade volumes indicate that a higher number of shares are bought and sold on a given day. High trade volume is a positive sign as it shows that the stock is in demand and has a large number of prospective buyers. Yes, all in all, it is a positive sign of liquid stock.

The stocks have high trade volume during a high float.

Float is the number of shares that are publicly owned and available on the market for trade. In a nutshell, a high float means a higher number of shares available for trading. A high trade volume during a high float is a sure sign that the higher number of available shares are also being traded at a high rate, thus insinuating a liquid stock.

Here are 7 key factors to consider when investing in liquid stocks.

Strong company fundamentals: Evaluate the company’s fundamentals, such as its financial health, debt-to-equity ratio, positive free cash flow, and more. Check if the company has growth prospects or is stable.Volatilities: Some stocks are liquid but volatile. Hence, before investing, check and analyse the price swings that the stock may experience. Cyclical nature: Some liquid stocks may be cyclical and belong to industries that have a cyclic trend. This cyclic trend helps in predicting possible ups and downs in stock liquidity.Regulatory changes: Sudden changes in a sector’s regulatory environment may affect its stocks’ liquidity. Be aware of possible legislative shifts.Orders in layers: In addition to the trading volume, consider the market depth, which demonstrates the number of buys and sell orders at different price levels. A stock with many orders lined up beyond the top bid and ask prices normally has deeper market depth, which adds to its liquidity.Consistency in dividends: Regular and consistent dividend-paying stocks usually attract more investment, contributing to their liquidity. However, a sudden change in a dividend policy can affect an investor to the point of changing their overall sentiment, thereby affecting the stock’s liquidity.Historical liquidity trends: Historical liquidity patterns can provide insights into how a stock’s liquidity responds to different market conditions. Hence, analysing the historical liquidity trends of a stock may help in informed decision-making.

Some benefits of investing in liquid stocks are as follows:

Ease of transaction: Their high liquidity means you can easily procure or dispose of these stocks with minimum influence on the price, making it good for either a short- or long-term strategy.Better price discovery: Liquid stock often facilitates better price discovery where the value of what the market holds in the company is well depicted.Flexibility: The investor can enter or exit the trade without causing a substantial movement in the stock price.Reduced spread costs: Since liquid stocks have narrower bid-ask spreads, the transaction cost is reduced.

While liquid stocks for intraday present opportunities for gains, they also carry certain risks. Here are 3 challenges you may face while investing in high-liquidity stocks.

Market volatility: The high liquidity of a stock suggests that it is not cushioned from market volatility. Stocks enjoying high liquidity can also prove volatile, with sudden price swings arising due to unexpected uncontrollable circumstances.Risk of overtrading: Liquid stocks’ quick and easy trading facility could lead investors to engage in overtrading, raising transaction costs while eating out returns.Research complacency over liquid stocks: Investors could lack extensive research because liquid stocks provide a facade of safety.

Let’s understand how stock liquidity plays an important role in strategising your stock market game plan and how to use liquidity in different scenarios:

In such cases, liquidity does not matter crucially, so hold the stocks for a longer time. In fact, for the long-term, financial experts often suggest medium-volatile stocks to maintain lower risk.

Long-term investors can afford to sit on the bid, as liquidity is not an issue at all. If you are a long-term investor, you may be able to tide over periods of illiquidity and wait for new buyers or sellers to eventually show up.

For a day-trader or swing-trader, liquidity matters the most because of the short time frame of the trade. In order to not hold your stock position open for a long time, it is crucial that you pick liquid stock. Liquidity is, therefore, an absolute must, especially for stop-loss orders.

If you are a short-term trader, you often have to deal with small moves in price to fill orders as close to the desired prices. To save yourself from a losing day, you should be able to close your position easily. Liquidity in stocks is very important for day traders.

This is a tricky phase. In such cases, you should ideally consider steering away from high volume stocks or liquid stocks as they may experience high volatility in price.

However, illiquid stocks may also make one anxious. Instead, you could possibly look for stocks that are liquid but also are medium-volatile. This may keep you at comfortable risk levels possible.

Trading volume: Higher trading volumes generally denote higher liquidity. An increase in trading activity implies that there are more buyers and sellers who intend to engage in trades.Number of market participants: If the markets have a greater number of participants, then the liquidity will be higher. These may be the retail investors, institutional investors, or even market makers.Size of company and profile: Shares of bigger and more established companies tend to attract investors’ interest and, hence, are normally more liquid.Market conditions: Liquidity in the market may be influenced by changing economic conditions or by regulation, as well as by an event that has occurred in a foreign part of the world. For example, during a period of heightened uncertainty, liquidity naturally always contracts.

Intraday trading requires careful consideration of various factors, and choosing the right stocks to trade is crucial for success. Liquidity plays a significant role in executing trades swiftly and efficiently, while volatility offers potential profit opportunities. Remember to conduct thorough research, employ effective risk management strategies, and adapt to market conditions while engaging in intraday trading. With the right approach and careful selection of liquid stocks, traders can aim to maximise their intraday trading potential and achieve their financial goals. And for deeper analysis, #TickertapeHaiNa!