BTST Means- Use of BTST Trading

More articles

BTST Means

BTST Trading is an acronym for Buy Today, Sell Tomorrow. It is a method of selling shares before they are transferred to a Demat account or delivered. A trade should be completed in two days.

Thus, best stands for Buy Today, Sell Tomorrow, and ATST stands for Acquire Today, Sell Tomorrow. STBT is an acronym for Sell Today, Buy Tomorrow and is the inverse of BTST.

Use of BTST Trading

When you place an equity delivery order, the shares you purchase are credited to your Demat account in T+2 days, where T is the trading day. On the other hand, the seller also receives credit in his account on T+2 days.

If the shares you purchased grow in value and you intend to profit from them, you will be unable to sell them if the transaction is standard order. However, if the order is a CNC or cash and carry, you may sell the shares and book profits.

Is There a Risk to BTST Trade Execution

While the risk is not as significant as it formerly was, it is still present. There is a hidden potential that the individual from whom you purchased the shares may fail to deliver the stock to you by the close of trading the following day.

If this occurs to you, keep in mind that the penalty for fast delivery is not fixed and is determined by market movement and liquidity. You will be obligated to cover the difference between the price at which you sell the stock and the price the exchange purchases it during the auction process. You will be required to pay the difference between the price you received for your shares and the price the exchange purchased them at the auction.

This price can be as high as 20% or, if you’re lucky, as little as 1% or 2%.

How To Do BTST Trading

  • Keep up with the latest news from the firm or its related area.
  • Maintain an eye on upcoming events affecting the stock or sector.
  • Analyze the firm’s fundamentals, including trade histories and shareholding movements.
  • Consider performing BTST in large-cap or nifty 50 stocks to exit the role without losing money if you do not receive a boost.
  • Bear in mind your stop loss and benefit booking points to ensure a timely exit.
  • To develop a more reliable entry point, conduct many market chart analyses.
  • Purchase a little quantity to familiarise yourself with the stock.

Advantages of BTST

  • You’ll have more money if you buy now and sell later.
  • It is possible to sell a stock you bought on Monday utilizing BTST before the settlement date.
  • If the stock price starts sliding the next day, you’ll be able to reduce your losses. As a result, you do not have to hold onto those shares for a third day before selling them.
  • To resolve any short allotment that may have occurred, you’ll need to make arrangements for the shares needed to cover the shortfall. It is best to trade in highly liquid Group A equities to avoid the auction penalty.
  • Securities purchased and sold through BTST will be credited to and debited from your Demat Account by standard pay-in and pay-out procedures.
  • No further steps will be needed from the customer to complete a typical transaction.
  • The stock multiple determines the margin release following the sale of equities under BTST. Details can be found on the Margin Requirements page.
  • The average delivery brokerage would be charged on both sides of the transaction.

Disadvantages of BTST

  • In contrast to intraday trading, many stockbrokers do not provide margin to the BTST service. The customer must cover the total cost of the order because it is cash & carries.
  • When you sell the deal the next day, you may be charged a fee in addition to the standard brokerage fee. As much as 20% of a company’s worth can be lost in this way. Aside from that, it’s a rare occurrence.

Final Thought

To be successful at BTST Trading, you’ll need a lot of practice and experience. You may, however, devise a technique to help you recover from bad trades.

BTST trades are carried out regularly by a large number of dealers. It is common to buy shares towards the end of the trading day and then sell them the following.

BTST Means

Thank you very much for reading this article. If you need any information related to this article, you can tell us through the comment box. Do share this article with your friends or relatives. Thanks once again.

What is the meaning of BTST?

BTST Trading is an acronym for Buy Today, Sell Tomorrow. It is a method of selling shares before they are transferred to a Demat account or delivered. A trade should be completed in two days.

How Secure Is BTST Trade?

If you sell your stock on T+1 without getting it in your Demat account, you’re taking the risk of Short Delivery. Your sell obligation will not be met if you do not get the total amount of shares on T+2 against your buy trade.

How To Do BTST Trading?

Keep up with the latest news from the firm or its related area. Maintain an eye on upcoming events affecting the stock or sector. Analyze the firm’s fundamentals, including trade histories and shareholding movements. Consider performing BTST in large-cap or nifty 50 stocks to exit the role without losing money if you do not receive a boost. Bear in mind your stop loss and benefit booking points to ensure a timely exit. To develop a more reliable entry point, conduct many market chart analyses. Purchase a little quantity to familiarise yourself with the stock.

Is There a Risk to BTST Trade Execution?

While the risk is not as significant as it formerly was, it is still present. There is a hidden potential that the individual from whom you purchased the shares may fail to deliver the stock to you by the close of trading the following day.

What is the use of BTST trading?

When you place an equity delivery order, the shares you purchase are credited to your Demat account in T+2 days, where T is the trading day. On the other hand, the seller also receives credit in his account on T+2 days.

Why can’t we use BTST?

Buy Today, Sell Tomorrow (BTST) orders are not allowed in the following circumstances: A T2T scrip is what you’re looking for. Because of the scrip’s illiquidity, it’s quite likely that it will be delivered late.

- Advertisement -spot_img

Latest