BTST (Buy Today, Sell Tomorrow) is a facility that allows customers to sell shares before they are credited into a Demat account or take the delivery of shares. The decision has to be made in 2 days.
This facility is also known as ATST or Acquire Today, Sell Tomorrow. The reverse of BTST is called STBT i.e. Sell Today, Buy Tomorrow.
This facility is offered by most of the stockbrokers in India like Zerodha, ICICIdirect, etc., where you can buy a stock today and sell it tomorrow.
BTST Means
In a normal equity delivery trade (buy/sell of stocks using CNC order), the transaction is complete in T+2 days where T is the day of trading. The buyer gets shares in his Demat account and the seller gets money in T+2 days. So, if you buy some shares of a company on Tuesday, the shares will be credited to your Demat account on Thursday. While counting T+2 days, holidays in exchanges are excluded. So, if there's a holiday in between then the delivery period is extended.
What if you got an opportunity to book the profits or losses in between those 2 days? You cannot take this opportunity as it's a normal order. This may result in losses for the trader.
BTST solves this problem of traders by allowing them to buy or sell their securities before these are credited to their Demat account. This helps traders to benefit from short-term volatility in the price of the stocks.
To do BTST trades, you just have to buy the stock using the CNC product type and the next day sell the stock using the CNC product type. The broker takes care of these transactions in the background.
The customer does not have to choose any special order type or follow complex steps to use the BTST facility. No special permissions or approvals are required for this facility.
Note: That BTST trades are not allowed on Trade to Trade stocks and Stocks under GSM (Graded surveillance measures) or ASM (Additional surveillance measures).
BTST Key Features
In BTST, you can sell a share before it is credited to your account. This option is available for two trading days after the buy order. On the third day, shares will be delivered to your Demat account, and you can place a normal sell transaction.
BTST is a unique trading facility provided by a few brokers.
The BTST facility is only available for scripts that are approved by the share broker. For example- ICICI Direct allows BTST selling option only on NIFTY, NIFTY Junior & Margin Trading Scripts.
Most brokers do not provide BTST facilities for SME companies.
BTST is not available for stocks in the T2T Segment (Trade to Trade Segment) wherein you have to compulsory take delivery of the stocks.
BTST Advantages
It allows you to benefit from the short-term volatility or increase/decrease in the price of the stocks.
BTST trades do not attract Demat Debit Transaction Charges as shares are not credited in your Demat account.
If you find intra-day trading unprofitable, then BTST gives 2 more days to your trades to improve its performance.
BTST Disadvantages
Unlike intraday trading, most stockbrokers do not offer margins to BTST facilities. The customer has to pay the full amount as the orders are cash & carry orders.
BTST also comes with the risk of short delivery. Let's assume you buy 100 shares under BTST today and sell the 100 shares the next day. Now, what if the person who sold you 100 shares didn't deliver to you for some reason. Of course, he will be penalized by the exchange. The exchange will auction the shares and the person will be charged a penalty of up to 20% of the value of the shares. Your shares will be credited on the next i.e. T+3 days.
Now, assume you buy the shares on BTST on Monday and sold them after an hour on the same day. You will get the delivery of bought shares on Wednesday and you also need to deliver the sold shares on Wednesday. In the case of short delivery, you will also not be able to deliver the shares and hence will be penalized by the exchange. So, in some scenarios, BTST may result in paying penalties.
BTST Brokerage Charges
BTST Brokerage Charges on Same Day
In such a case, your trade will be considered as an intraday trade and brokerage charges for intraday trading will be done.
BTST Charges on T+1 or T+2 day Sell
Equity delivery brokerage charges are applicable in such cases. i.e. Zerodha offers brokerage free equity delivery this means you don't pay any brokerage for these BTST orders.
Note: Some stock brokers may charge different BTST brokerage fees depending on your brokerage plan and the day of selling the shares. Please check with your share broker before placing a BTST order.
STBT (Sell Today, Buy Tomorrow)
STBT is an abbreviation for Sell Today and Buy Tomorrow. It is the reverse (shares are sold first and then bought) of BTST and works the same way as BTST.
None of the brokers in India offer STBT facilities as they do not offer to short in delivery trading. Shorting is available in intraday trading.
If you have stocks in your Demat, you can sell them today and buy them back tomorrow. Without stocks in Demat, you can't do STBT.
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