What is BTST and STBT in Trading-Tips for Beginners

What is BTST and STBT in Trading

In the tricky stock market, traders are always seeking suitable opportunities to make more money in the market. Here, the more you able to apply your ideas, techniques, the more profitable you will be. BTST and STBT are two of the most important orders which we will cover in the article. These are the most active and effective orders, the facility is offered by the most stockbrokers in India. After stating the answer to What is BTST and STBT in Trading, we will go forward to the examples.

What is BTST and STBT in Trading?

The forms are abbreviated, BTST means Buy Today Sell Tomorrow and STBT is Sell Today Buy Tomorrow. Broadly speaking, the BTST and STBT both play the crucial roles in trading. Let’s come to one by one to the main discussion point.

Buy Today Sell Tomorrow or BTST

As the name suggests the particular order is only for a short-term trading opportunity. By using the order type, traders can buy stocks or FnO segments and sell it on the next day of buying. This means, unlike the holding and intraday, traders can exit from this order in the next day of buying. So, it is quite obvious that the stocks which are likely to be high the next day, are worth buying by using the order.

For example, you buy a stock of Reliance today at Rs.990 and as per your analysis it will go high the next day, in this case, you can use the BTST strategy.

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Sell Today Buy Tomorrow or STBT

Like BTST, Sell today buy tomorrow also applicable for short-term trading but there is a slight twist. Unlike BTST, it is useful only for FnO trading, normal stock trading is invalid here. Meaning-wise, it is exactly the opposite of BTST. Here, traders sell FnO stocks and buy it the next day of selling.

Trading Strategies in BTST and STBT

Though the characteristics look quite attractive, the risk is high enough. We will get back to the risk issue after describing trading strategies.

  • For some broker, the amount of brokerage is high here in comparison to normal orders.
  • Some traders confuse the system with intraday while it is completely different from the intraday section.
  • Stock markets are quite volatile, so check and analyze a stock before putting the order.

Risk Factors

Firstly, as I’ve mentioned that when the market is in volatile position, the risk factor is high enough to deal with BTST and STBT. Hence, it is advisable not to work with it during that time.

Secondly, always use stop loss with these orders to minimize the risk factor.

However, the meaning of this is too simple but traders need to know the exact placing time of these orders.

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