What is BTST in Share Market?
Aug 9, 2017 · 1 min read
BTST — Buy Today and Sell Tomorrow allows you to sell the shares on the next day you have bought, without waiting to get them credited in your demat account. Using this facility has it’s own merits ans demerits.
Merits of BTST:
- You don’t need to wait for the delivery. You can exit your position whenever you find it is the best time.
- As you have sold the shares before it is credited in you demat account, you’ll not be applied DP transfer charges which is apx Rs15(varies from broker to broker).
Demrits of BTST:
- If traders convert intraday positions to delivery, they need to keep in mind that STT (Securities Transaction Tax) will go up almost 10 times as STT is higher for delivery as compared to intraday.
- Stocks sometimes are moved to T2T Segment(Trade to Trade Segment) by the exchanges to curb speculative interest. When a stock is moved to T2T, you will have to compulsory take delivery. When a stock is moved to this segment, you will not be able to do intraday or BTST trading.
- Most important risk of BTST is the risk of Short Delivery.
BTST is very successful practice by many traders but they should be cautious with short delivery. If traders are planning for BTST, they should select high liquidity stocks and try to avoid penny stocks.
Read the detailed article about BTST.