What are Trade to Trade or T2T stocks? (2024)

FAQs

What are Trade to Trade or T2T stocks? ›

T2T stands for "Trade-to-Trade" in the stock market. It is a segment where stocks can only be traded on a delivery basis. This means that when you buy T2T stocks, you are required to pay the full amount for the stock, and intraday trading or BTST (Buy Today, Sell Tomorrow) trades are not allowed.

If the stock's valuation exceeds the price-to-earning(P/E) ratio, the BSE and NSE transfer it to the T2T segment. For example, if Nifty is within 10-15 and the stock's P/E is 25, the stock is considered fit to transfer to T2T. The P/E evaluation is based on earnings per share of stock.

T2T stocks or Trade to Trade stock means stocks are those that must be delivered in order to be traded (T+2 settlement). This implies that such equities cannot be traded intraday or, in the case of Buy Today Sell Tomorrow, on a daily basis.

Newly listed stocks are traded under T2T for first 10 days from listing date. These shares will show in your demat account only after 2-3 days.

This means that when you buy T2T stocks, you are required to pay the full amount for the stock, and intraday trading or BTST (Buy Today, Sell Tomorrow) trades are not allowed. T2T stocks are often considered speculative and can carry higher risks.

You can sell T2T shares only after you receive the delivery of the shares in your demat account, which usually takes two working days (T+2) from the date of purchase. If you try to sell T2T shares on the same day or before the delivery, your order will be rejected by the exchange.

The idea here is to curb speculation in stocks that could be vulnerable to price manipulation due to their small size. IPOs are normally excluded from these T2T criteria. Remember, just as companies can be shifted to the T2T segment, companies can also be shifted back from the T2T segment to the normal segment.

Technical traders usually want to identify strong, uptrending stocks for potential buys and weak downtrending stocks for shorts. One way to find them is to use moving averages, which are trend-following indicators that smooth out day-to-day price movements to show a stock's general direction over time.

When there are no buyers, you can't sell your shares—you'll be stuck with them until there is some buying interest from other investors. A buyer could pop in a few seconds, or it could take minutes, days, or even weeks in the case of very thinly traded stocks.

What is the best month to sell stock? ›

Stocks generally perform better between November and April than between May and October. Increased volatility on the third Friday of March, June, September, and December when options and futures expire. Simultaneous expiration of stock options, stock index futures, and stock index options.

The opening period (9:30 a.m. to 10:30 a.m. Eastern Time) is often one of the best hours of the day for day trading, offering the biggest moves in the shortest amount of time. A lot of professional day traders stop trading around 11:30 a.m. because that is when volatility and volume tend to taper off.

Traders typically look for short-term price inefficiencies; investing is more about long-term capital appreciation through growth and/or dividends. Traders often use technical analysis to help find entry and exit opportunities, whereas investors often rely on company, industry, and economic fundamentals.

As a retail investor, you can't buy and sell the same stock more than four times within a five-business-day period. Anyone who exceeds this violates the pattern day trader rule, which is reserved for individuals who are classified by their brokers are day traders and can be restricted from conducting any trades.

You should exit a trade when: You have reached your profitability target. When it hits a stop loss or a take profit level. When the reasons why you entered a trade change.

If you can't meet your daily lifestyle, your day-to-day living, or you're in debt, you should quit trading immediately. This is one of the major signs when to stop trading. Trading is not like a job that pays you a fixed income where there's a fixed payout every month, it doesn't work that way.

It is a path that a product takes from the manufacturer to the end consumer. For example, a clothing manufacturer may use different channels of trade to sell their products. They may sell their clothes through their own retail stores, online stores, or through department stores.

Examples of Spread Trading

Commodity Spread: Buy gold futures in one month and sell gold futures in another month to take advantage of price differences. Inter-Exchange Spread: Buy a currency future on one exchange and sell the same currency future on another exchange to exploit the price differences between exchanges.

The polity maintained a robust trading network, entered into treaties with foreign powers, and exerted strong centralized authority on the domestic front.