What Is a BTST Trade and How It Works in Indian Markets

BTST trading is a short-term trading method used in the Indian stock market. The term BTST stands for Buy Today, Sell Tomorrow. As the name suggests, traders buy shares on one trading day and sell them on the next trading day. This approach helps traders benefit from overnight price movements without waiting for delivery in their Demat account.

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What Is BTST Trade?

When you buy shares in the cash market, they are credited to your Demat account on a T+1 basis. This means delivery is completed one day after the trade. In a BTST trade, you sell the shares before this delivery takes place. The broker allows this trade if the required margin is available.

BTST trading sits between intraday trading and delivery trading. It offers more flexibility than intraday trades and requires less commitment than long-term investing.

How Does BTST Trading Work?

A trader identifies a stock that may rise in price by the next trading session. The shares are purchased during market hours. If the price increases the next day, the trader sells the shares and books a profit. The entire trade depends on short-term price movement and market sentiment.

To avoid losses, traders usually place a stop-loss order. This helps control risk if the price moves in the opposite direction.

Key Features of BTST Trading

BTST trading allows quick profit opportunities. It suits traders who track market trends and price action closely. It also helps avoid long holding periods.

However, BTST trades carry risks. Price gaps can occur due to overnight news. There is also a risk of delivery failure, which may lead to auction penalties.

Conclusion

Understanding what is BTST trade is important before using this strategy. BTST trading can be effective when used with discipline and proper risk control. It works best for traders who prefer short-term opportunities and follow the market closely.

If you’re getting started, you can open a demat account and explore the share market with a structured view.