What is BTST or STBT:

If we try to explain STBT and BTST calls, these are very short term trading calls. These are also called overnight trades. BTST or STBT calls are different from intraday calls. In intraday calls you take a trade in the morning, after the opening of the stock market and close it by the end of the day.

While in case of BTST (Buy Today Sell Tomorrow) or STBT (Sell Today Buy Tomorrow) you take a trade near the closing of the share bazaar. These BTST and STBT calls are closed on the next trading day after the opening of stock market.

BTST:

In case of BTST it is usually advisable to take an overnight trade in futures segment. If you purchase a stock in equity segment today, you will get the delivery of that stock on the third day. Normally brokers allow you to sell today’s purchase on the next trading day, except in case of ‘Trade for Trade’ scrip. But the brokerage is higher in case of delivery, so BTST is more use full in derivative segment. Some times in case of midcap or small cap stocks which are not in future’s segment, you can use BTST even in equity segment, because there is no other choice.

STBT:

A stock must be in Futures segment, if you want to sell it and carry it overnight for a STBT trade. Because, there is no short selling allowed in equity segment. You can sell stocks at any time, which are in your demant account.

But you can’t sell stocks which you don’t hold in your demant account. If you short sell a stock in cash segment, you have to buy it back by the end of the day. So for a STBT call, you can only short sell index, stock, commodity or currency future.

BTST/STBT® relevant is relevant for you:

1. If you have you ever missed making a huge profit because you had bought the shares just one day back and you could not sell them as they were not credited to your demant account?

2. If you have ever found that squaring off your cash based transactions within a day is not profitable as one days’ time does not allow realizing maximum profit?

3. If you have ever thought of an intermediate option between cash and Margin trades where in you could make profits on volatile shares within one or 2 days of you’re buying them without a compulsory square off?

If you have ever faced any of the above situations, BTST® is for you.

A Word of Caution Regarding BTST/ STBT Calls

BTST/STBT calls can work as a double-edged sword. Traders can earn huge profit but there are chances of losing their hard earned capital if some adverse event happens overnight that leads to fall in the purchased stock price. Domestic as well as international events play an important role in the outlook of the stock market. For example, During recent Gujarat elections there was a huge GAP down opening in indian stocks market when exit poll results were not in favour of BJP. Hence, trading in BTST calls should be ideally done with the help of an independent SEBI registered advisor who is aware of such market movements.

What Should an Investor/traders Do?

Investors need to follow a cautious approach while trading in BTST/ STBT calls.

• Getting help from an experienced, independent SEBI registered financial advisor will make it easier to track the ups and downs in the market. It might not be possible for an investor to accurately analyse the market movement, take positions with a margin and sell the stock before settlement. A financial advisor can offer valuable tips about holding profitable positions in BTST calls and gain profits.

• Advice on BTST calls from brokers need to be avoided as the hard-earned capital of an investor would be significantly spent on paying the brokerage.

PS: Always apply STRICT Stop loss while trading in BTST/STBT .

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