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What is Trade to Trade (T2T) Stock

07 February 20245 mins read by Angel One
What is Trade to Trade (T2T) Stock
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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. This means, If you acquire Trade 2 Trade stocks today, you won’t be able to sell them until the T+2 settlement takes place. Your order will be refused if you try to sell these shares the same day or before they are in the Demat account.

Stocks that are very volatile or have irregular price movements are monitored by exchanges in cooperation with the market regulator, SEBI. They put stocks in the T2T section to shield regular investors from being caught up in the volatility and to limit unwarranted speculating on such equities.

On a biweekly basis, exchanges relocate stocks to the Trade to Trade sector, and they are shifted in and out of the segment depending on quarterly evaluations.

A mix of, but not limited to, price to earnings overvaluation, price fluctuation, and market capitalization are some of the primary factors utilised to convert stock to the T2T sector. Also evaluated for transfer to the T2T sector are stocks that are not available for trade in the F&O section.

Exchanges classify scrips into several series depending on the kind of instrument and settlement. The Trade 2 Trade stocks are classified as a separate series. The NSE and BSE websites include a list of these stocks.

How to trade in t2t stocks on Angel One

You can place buy/sell orders on the move with Angel One using the below simple steps:

  • Open the Angel App on your mobile device.
  • Click the ‘Log in to Trade’ option at the bottom.
  • In the top left corner, click the ‘Menu’ button.
  • Select ‘Trade > Holdings’ link.
  • Select the stock you wish to sell by clicking on it.
  • Select the ‘Sell’ option.
  • Fill in the details of your order.
  • Submit the form by clicking the Submit button.
  • Check and confirm your order.

How to identify T2T stocks?

T2T is specifically devised by exchanges in consultation with SEBI to avoid any unwanted occurrences. It’s a step to protect the interest of traders/investors.

T2T means only delivery based settlement. (intraday is not allowed by design) You buy stock by paying for that trade.

In case one buys and sells the stock on the same day (intraday) then Exchange will treat those transactions as different trades altogether :

  1. Stock bought – will become a part of delivery.
  2. Stock sold – (you sold stocks without you having its delivery) which means it will be settled by auction as you broke the fundamental rule of t2t which does not allow you to sell a stock you don’t hold in delivery. It’s a costly affair.

In short before initiating any intraday transaction, check the category.

Things to keep in mind while investing in T2T Stocks

  • Delivery of such supplies is required.
  • Buy Today Sell Tomorrow transactions are not permitted intraday.
  • If you try to sell T2T holdings from your portfolio before they have completed their T+2 settlement, your orders will be refused.

Conclusion

Although the T2T section is difficult, it has its own set of benefits. By trading in the T2T segment, the investor can be safeguarded from price fluctuations and total speculations.

So, if you’re thinking about buying T2T stock, don’t forget to Open Demat Account with Angel One

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