What are the risks involved in BTST?

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 1 day.

BTST Key Features

  • In BTST, you can sell a share before it is credited to your account. This option is available for 1 trading day after the buy order. On the second day evening, 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.
  • 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 intraday trading unprofitable, then BTST gives 1 more day to your trades to improve its performance.

BTST Disadvantages

  • Unlike intraday trading, separate margins are required on both Buy and Sell legs
  • 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. The stock will then go into auction.