Many of the frontline brokers today provide value added services to their clients apart from plain vanilla broking facility. BTST, BNSTG and BNST are a few such schemes, which provide an option to investors to gain from upward market movements or convert their expected holdings into cash, even before actually receiving the shares. Following is a brief description of each of these terms:
a. BTST (Buy Today Sell Tomorrow)
BTST is the facility provided by broker ICICIDirect to sell shares bought by you without having to wait for delivery of shares. As settlement in Indian securities markets is on T+2 basis, shares bought on say Monday will only be credited to your account on Wednesday after pay-out. However if you want to sell shares bought by you, before Wednesday, without waiting for its delivery on Wednesday, you can do it under BTST. Thus it affords you an opportunity to sell before receiving shares bought by you earlier. However in case you do not receive allotment of earlier shares bought by you, there may be default on your subsequent sale. In that case, you will have to bear additional cost of auction or close out. Thus the scheme is not free from risk in the case of failure of your purchase transaction.
b. BNSTG (Buy Now Sell Tomorrow-with Guarantee)
BNSTG facility is offered by broking house- Kotak Securities. Under this scheme, an investor can sell upto 75% of shares bought by him before receiving the actual delivery of shares. The sale transactions are also guaranteed by Kotak Securities. Thus in case you receive short allotment in respect of shares bought by you, your subsequent sale transaction will still go through backed by guarantee of Kotak Securities. Hence you will avoid the penalty and other charges applicable in case of auction or close out of your sale position. This seems to be a better option than BTST as your subsequent sale is guaranteed and in the event of your failure to receive against your purchases, your broking house will come to your rescue.
c. BNST (Buy Now Sell Tomorrow)
BNST scheme offered by broker Motilal Oswal Securities Limited is like BTST scheme of ICICIDirect. Here also you can sell shares bought today before actually receiving them. The scheme is available for a select number of scrips. Here again in case of your earlier purchase transaction failing to get through, you may have to incur a loss on your subsequent sale.
