BTST
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What is BTST?
Buy Today Sell Tomorrow (BTST) trading is a standard trading strategy in the Indian stock market. As the name suggest, it involves buying shares on one trading day and selling them the next trading day, hence we get the name “Buy Today Sell Tomorrow”.
Remember, BTST is neither intraday trading nor positional trading. You won’t get margin benefits from broker & you need to have the full amount available in your trading account. Unlike positional trades, you don’t need to hold the stocks for a longer duration.
How Does BTST Trading Work?
In BTST trading, traders buy shares on one trading day and sell them the next trading day. The idea behind this strategy is to take advantage of short-term price movements in the market. Traders often use technical analysis to identify stocks that are likely to experience a short-term price rise.
BTST trading is most commonly used by traders who do not have the financial capacity to hold positions for a longer duration. It is also useful for traders who want to take advantage of the volatility of the market and avoid overnight market risk.
BTST Trading in India
BTST trading has gained popularity in India in recent years. According to data from the National Stock Exchange (NSE), the average daily turnover in the cash market segment was Rs. 57,366.28 crore in February 2022. A significant portion of this turnover is from BTST trading.
According to the National Stock Exchange (NSE), BTST trading accounts for around 12-15% of the total trading volume in the Indian stock market, this is a clear indicator that BTST trading in India is getting popular.
BTST: Advantages & Disadvantages
Advantages
- BTST trading allows traders to take advantage of short-term price movements without having to commit a large amount of capital. This is particularly useful for retail traders who may not have access to large amounts of capital.
- BTST trading help traders avoid overnight market risk. This is because trades are settled on a T+2 basis, which means that if you buy shares on Monday, you can sell them on Wednesday without having to worry about the overnight market risk.
Disadvantages
- BTST trading can be risky, as short-term price movements can be unpredictable. Traders need to have a sound understanding of technical analysis to identify stocks that are likely to experience a short-term price rise.
- BTST trading can be expensive, as traders need to pay brokerage fees for both buying and selling shares. Additionally, traders need to be aware of the tax implications of BTST trading, as short-term capital gains are taxed at a higher rate than long-term capital gains.
Summary
BTST trading can be a useful trading strategy for traders who want to take advantage of short-term price movements in the market. However, it is important to remember that BTST trading involves significant risks, and traders should be aware of these risks before entering the market.
With Gainn Fintech, ride the rising popularity of BTST trading. Large numbers of retail traders are already using this strategy to make short-term profits in the stock market and they are trusting Gainn in their trading endeavors. Gainn provides high-tech tools for proper research and risk management to make BTST trading a valuable addition to your investment portfolio.
