How are shares settled in a BTST transaction?

BTST (Buy Today, Sell Tomorrow) transactions involve buying shares on one trading day and selling them the next. The settlement of BTST transactions typically occurs on T+2, which is two days after the transaction is initiated. In a BTST transaction, you buy shares during regular trading hours, and then sell them the next day during the same trading hours. Once the transaction is executed, the shares are transferred from the seller's demat account to the buyer's demat account, and the funds are settled through the clearing corporation.

For Ex.: On Monday, you buy 100 shares of XYZ stock at a price of Rs.100 per share. On Tuesday, you sell those shares at Rs.105 per share. Since this is a BTST transaction, the shares are transferred from your demat account to the buyer's demat account on Wednesday (T+2). Meanwhile, the money you received from the sale of the shares is credited to your trading account on the same day (T+2).

The process ensures that you are the rightful owner of the shares and are entitled to all the benefits that come with it. The process is also more transparent as the corporate actions, dividends, and TDS deductions are all recorded under your name and PAN.

Please note that - While there may be some DP charges for BTST transactions, the benefits of ownership and transparency outweigh the costs in most cases.