Buy Today, Sell Tomorrow (BTST)

Buy Today, Sell Tomorrow (BTST)

BTST is “Buy Today, Sell Tomorrow.” It is a trading strategy used in the stock market. BTST trading is based on a simple premise. that is buy shares/stocks on one day (today) and sell them on the following day (tomorrow), for a profit gain.

In simple way, Buy Today, Sell Tomorrow (BTST) is a trading strategy where you buy a stock today and sell it the next trading day. It’s a way to gain profit on short-term price movements, particularly if you expect the price to go up overnight.

• Aim: Profit from a stock’s price increase between the buy and sell days.
• How it works: You buy shares/stock on one day (today) and sell them the next day before they are settled into your demat account. BTST allows to capture potential gains quicker than waiting for the standard settlement cycle.

Things to consider with BTST Strategy:

• Risk: BTST involves risks like the price going down instead of up. You could lose money. Risk of Short Delivery: In BTST trading, there is a small risk of short delivery, where the seller fails to deliver the shares on time.
• Settlement: While you can sell the stock before it settles. You’re still obligated to deliver the shares if you bought them on margin (borrowed money from the broker). Failing to deliver can result in penalties.
• Brokerage: Not all brokers offer BTST, and some may charge additional fees for it.

STBT vs BTST:

STBT means ‘Sell Today, Buy Tomorrow’ is the opposite of BTST trades wherein you sell stocks first and buy them later. As per SEBI’s regulation in India, only BTST trades are allowed to purchase shares/stocks in the cash or in the futures & options segment. Stock broker are not allowed in India to offers STBT trades.

BTST vs Intraday Trading:

BTST differs from intraday trading where you buy and sell the stock on the same day. Where BTST is holding the stock overnight and selling it the next day.