How do I find the best stock for BTST?

Price breakouts in candlestick charts The 15-minute candlestick trading chart showing the share's highs, lows, closing, and opening prices is an excellent tool to identify BTST stocks. The most price action happens during the last leg of the trading session after 2 pm when intraday traders start settling their trades.

What is the new BTST rule?

Your shares will be credited the next day, or T+3. The price increase at the very end of a trading session may be the consequence of the market's automatic response and may not continue into the following session. SEBI modified the BTST regulation in 2020. Before initiating a BTST deal, traders must pay a 40% margin .

What is the 11am rule in trading?

It is not a hard and fast rule, but rather a guideline that has been observed by many traders over the years. The logic behind this rule is that if the market has not reversed by 11 am EST, it is less likely to experience a significant trend reversal during the remainder of the trading day .

What is the 3-5-7 rule in trading?

The 3–5–7 rule in trading is a risk management principle that suggests allocating a certain percentage of your trading capital to different trades based on their risk levels . Here's how it typically works: 3% Rule: This suggests risking no more than 3% of your trading capital on any single trade.

Is BTST trading risky?

The biggest risk associated with BTST is short selling . These trades happen without shares actually settling in your account. If the seller defaults on the delivery of the stocks on time, you won't be able to meet your obligations as the seller. In such cases, you also face the risk of an auction penalty.

Intraday and BTST are restricted in these securities as they need to be compulsorily delivered to the trader's account . Therefore, if a trader tries to place an order before the shares get credited to their DEMAT account, the order gets rejected automatically.

Can I buy a stock back tomorrow if I sell it today?

You can buy the same stock back at any time , and this has no bearing on the sale you have made for profit. Rules only dictate that you pay taxes on any profit you make from assets.

Which is better intraday or BTST?

Understanding whether BTST trading is better than intraday depends on the investor's risk appetite. One on hand, BTST allows you to take advantage of short-term price fluctuations. On the other hand, the risks associated with a drop in future stock prices after market closing hours are also possible.

What is the BTST strategy?

BTST stands for "Buy Today, Sell Tomorrow." It is a trading strategy used in the stock market. BTST trading is based on a simple premise: purchase shares on one day and sell them on the following day, ideally for a profit .

When should I sell a rising stock?

A Stock Hits the Price Target As a stock price rises, investors can begin selling the position once it reaches the price target range . Investors can either sell it all at the price target or ease out of the position over time at various price targets.

What is the 10 am rule in stock trading?

Some traders follow something called the "10 a.m. rule." The stock market opens for trading at 9:30 a.m., and the time between 9:30 a.m. and 10 a.m. often has significant trading volume. Traders that follow the 10 a.m. rule think a stock's price trajectory is relatively set for the day by the end of that half-hour .

Is BTST trading profitable?

Yes, BTST in trading can be profitable for traders who can capitalise on short-term market movements and manage risk well. However, like with all other trading and investing strategies, profits are not guaranteed in BTST trading, and it does come with a higher level of risk.

BTST Stocks for the Day | 5paisa (2024)

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Btst Stocks For The Day

Last Update on: 21 Jun, 2024

STOCK	ACTION	CMP	SL	TARGET1	TARGET2
NBCC (India) Ltd.	BUY	166	159	173	180
Indian Renewable Energy Development Agency Ltd.	BUY	184	175	194	200
Ircon International Ltd.	BUY	277	265	289	297

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Stocks to Buy Today & Sell Tomorrow: 21-Jun-24

5paisa analysts bring the best intraday ideas, short-term ideas and long-term ideas for you. In the morning we provide best momentumstocks to buy today, while in the last trading hour we provide Buy Today Sell Tomorrow (BTST) and Sell Today Buy Tomorrow (STBT) ideas.

1. BTST :NBCC

● Current Market Price:₹166

● Stop Loss:₹159

● Target 1:₹173

● Target 2:₹180

2. BTST :IREDA

● Current Market Price:₹184

● Stop Loss:₹175

● Target 1:₹194

● Target 2:₹200

3. BTST:IRCON

● Current Market Price: ₹277

● Stop Loss: ₹265

● Target 1: ₹289

● Target 2: ₹297

BTST trading is common among experienced investors. Often known as "buy today, sell tomorrow" deals, these trades are extremely short term where investors buy stocks today and sell them the next day to take advantage of a possible price rise in the stock. However, many investors remain wary of this trading technique as the risk involved is high.

What is BTST Trading? | BTST Vs STBT

BTST Trading is an unconventional procedure that helps traders deal with BTST shares in the stock market and take advantage of their short-term volatility. BTST in the stock market allows traders to sell out shares bought but not yet received in the traders' Demat account.

The conventional trading procedure or the T+2 process ensures that the shares are credited to the traders' Demat account after T+2 days, where T signifies the day of trading, which means that there is a time gap between the trading and the actual arrival of the shares to the trader. Due to this significant difference, many traders find BTST trading better than intraday trading.

How Does BTST Trade Work?

Indian financial markets operate on a T+2 settlement cycle. If you purchase a stock on Monday, it will arrive in your Demat account on Wednesday. You can, however, sell your shares before they arrive in your Demat account. Suppose you have₹20,000 in your trading account. You purchased 5 L&T shares on Monday for₹4,000 and sold them on Tuesday for₹4,100 a piece.

₹20,000is the Buying Price
₹20,500 is the Selling Price

The ₹20,000 in your account will be restricted on Monday for purchasing L&T shares. (Resolves with the exchange on Wednesday (T+2)).

You sell the shares on Tuesday that you would have ideally delivered on Thursday. You are allowed to sell the shares on the trading platform because the delivery of L&T shares is on Wednesday, per plan. The stockbroker receives these shares on Wednesday, deducts them from your upcoming delivery obligation, and finalizes the deal on Thursday. You are still permitted to use 80% of the sale proceeds to buy new stocks on the day of the sale, even though you do not receive the credit for the money made from selling your stock for another two days (in this example, Friday). On T+1, the remaining 20% becomes accessible for purchasing additional stocks (in this case, Thursday).

Is There a Risk to Executing BTST Trades?

Several traders are apprehensive of short-term trading since it may involve risk. The desire to make a quick profit is always present, but whether this is possible, given how volatile markets can be, remains to be seen. There is a remote possibility that the investor from whom you acquired the shares may fail to deliver the stock to you by the end of market hours the following day. You do not influence this; nobody can predict how transactions will proceed due to certain delays.

If this happens to you, be aware that the penalty for late delivery is not fixed and is calculated individually. In such a case, keep in mind that price movement and liquidity determine the short delivery penalty. You will be required to pay the difference in price between when you sold your shares and when the exchange acquired them at the auction. If you're lucky, the cost will be only 1 or 2 per cent, but it could be as high as 20%.

What are the Advantages of BTST Trading?

BTST buy-sell trading has many benefits:

●BTST buy-sell increase your profit when you anticipate a rise in the stock price
●Before the Demat account settlement, you have two days to finalise the agreement
●You won't be charged for Demat transaction fees because it doesn't include Demat delivery
●BTST buy-sell Transaction fees are lower than for typical buy-sell trades
●Many brokers may use almost 80% of the selling profits to make additional trades on the very day of the sale
●In BTST buy-sell trading, you have an extra day to profit from the market compared to intraday trading

BTST stock market trading may be profitable if done correctly. It is important to note that the trader must be alert to any unexpected price changes in the equities they have picked. BTST may be the best option to capitalise on a potential increase in the stock price in only one day if the chance arises. Investors employ BTST when they anticipate a price breakout in favour of the investment on the next trading day.

Final Thoughts

About the Author

Sachin Gupta

Mr. Sachin Gupta is a Senior Research Analyst at 5paisa, based in Mumbai. He has over 10 years of experience in Equity, Commodity research and strategies.

Disclaimer: Investment/Trading in securities Market is subject to market risk, past performance is not a guarantee of future performance. The risk of loss in trading and investment in Securities markets including Equites and Derivatives can be substantial.

Frequently Asked Questions

Can BTST stocks be sold on the same day it is bought?

Intraday trading lets traders sell their shares on the same day it is bought, but unlike intraday, one can sell BTST stocks the next day.

Are there any specific stocks that are not allowed for BTST Trading?

Trade to trade stocks and stocks under GSM or ASM are not allowed for BTST trading.

What is the ideal time to trade in BTST?

The best time to acquire BTST stocks is half to an hour before the market closes and then selling it the next day at the earliest.

What are the Risks involved in BTST?

The risk with BTST buy-sell transactions is that because you are selling stock that is not yet in your Demat account, you depend on the seller from whom you purchased the shares to deliver the stock. If the seller fails to deliver the shares, i.e., your commitment to give shares breaks due to the short delivery, you will suffer an auction penalty of up to 20% of the short-delivered stock value.

What are the disadvantages of BTST trading?

Price increases toward the end of a trading session can result from the market's knee-jerk reaction and might not be sustainable in the next session. As BTST buy-sell trading occurs in the cash sector, brokers do not provide the same margin facilities to traders as they do for intraday trading.SEBI has revised the BTST regulation since 2020. Before completing a BTST deal, traders must pay a 40 per cent margin. If the seller does not deliver the stocks on schedule, the short seller may face a penalty. The shares will be auctioned off to you by the exchange. Because the entire procedure lengthens delivery time, you will be penalised if you fail to deliver products to the final customer.

What are the BTST trade strategies?

The following are some tested BTST trading strategies.1. Establish a stop-loss.2. Invest ahead of a Major Event.3. Use the 15-minute candle day analysis.4. Invest in high-liquidity stocks.5. Book profits after attaining goals.

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