Definition
BTST / STBT
BTST (Buy Today, Sell Tomorrow) and STBT (Sell Today, Buy Tomorrow) are short-term strategies of exiting a position before settlement completes.
In BTST, you buy shares one day and sell them the next, before they are credited to your demat account under T+1 settlement. STBT is the reverse (selling first), which is restricted in the cash market and mainly possible in derivatives.
BTST lets traders capture a quick overnight move without waiting for delivery, but it carries short-delivery risk: if the original seller fails to deliver, your sale goes to auction and you may face penalties. BTST is barred in Trade-to-Trade stocks.
Related terms
- T+1 SettlementT+1 settlement means a stock trade is settled one working day after the transaction date, so shares and money change hands by the next business day.
- Auction SettlementAuction settlement is the exchange process of buying in shares to resolve a short delivery, where the clearing corporation auctions the failed quantity and delivers the purchased shares to the affected buyer.
- Trade-to-Trade (T2T) SegmentThe trade-to-trade segment requires that every transaction in a listed security result in compulsory delivery, prohibiting intraday netting or speculation in that stock.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.