BTST (Buy Today Sell Tomorrow) and STBT (Sell Today Buy Tomorrow) are the terms used in the share market. Traders are always on a lookout for opportunities to make more money in the market. The decision to sale/purchase the stock is driven by its fundamental and technical strength. The confidence of the trader also plays a crucial role in it.
What is BTST?
It is a short-term opportunity wherein the trader purchases share today in cash or F&O segment and sell it the next day. The trader does not hold long positions. This BTST position is taken by a trader in those stocks which are expected to trade at a higher price tomorrow.
What is STBT?
It is also a short-term opportunity wherein the trader sells the stock today in an F&O segment and purchases back the next day. This is not possible in the equity segment of the stock market. This position is taken by the trader in those stocks which are expected to sell at a lower price tomorrow.
Difference between BTST/STBT and intraday trading
BTST/STBT is different from intraday trading. In BTST/STBT stocks are purchased/sold on one day and sold/purchased another day. In intraday stocks are purchased and sold on the same day.
How to trade in BTST and STBT?
The first and the foremost on sees is the break out in the direction either way during marketing hours. Say a share of a company is trading around 1000 during the day. In a day at around 3:00 pm, it rises suddenly to around 1020 which suggest a breakout in the price moving pattern the trader purchases share today and sell tomorrow at a higher price.
On the reverse, if the stock breakdown is in the downward direction that is from 1000 to 980 at 3:00 pm STBT position is taken by the trader in the F&O segment.
Risk traders take in BTST/STBT position
Everyone knows the stock market is a risky business and traders must be careful while taking BTST/STBT position. If the trader makes a wrong interpretation of the price movement the trader has to bear the loss. The market movements are highly unpredictable; it can move against expectation and will leave no option to book loss.
Trading tips and strategies
Strategies for BTST and STBT are highly attractive on returns but one must be careful while trading. It is advisable to have a stop loss in place. One must not trade in BTST and STBT when the stock market is very volatile or some major events are expected to happen overnight. Like RBI policy declaration, company results, change in government policy or rules, election results, etc. Trading is an art and requires skill and knowledge which is acquired with time. It is advised to invest your surplus money in the stock market so that in case anything goes wrong it will not affect your financial standing.
It is better to take tips from an experienced person or companies like Alliance Research to make good money and create wealth.