It is understood that while selling a share in delivery mode, exchanges will check whether I have the requisite stock in my demat account or not. If it is available then trade will get executed or if stock is not found in my demat account then trade will not be executed.

But when one tries do to BTST then theoritically if i have bought the shres today through delivery mode then it will credited after T+2 days in my DEMAT account. In such case how i would be able to do BTST i.e. sell the stock on the next day. In this case whether exhchanges will not check whether i have the shares in my DEMAT account or not?

Thanks in advance!!!

In that case The Intermediatory Depository Participant, lets say Zerodha, will debit the shares from the seller of the shares same day and then they will credit your shares on t+2, however in case of BTST the shares are still with zerodha and if you will sell them on next day then zerodha will not credit your account instead they will credit the account of the cleint to whom you sold the shares on t+2.

Thank You for bringing clarity!!!
Best wishes to u Mr. Ranjan!!!

I would like to ask one more thing:

So in case of BTST, if i m selling the shares tomorrow which i have bought today then
exchanges will check my shares are held with Zerodha or
exchanges will check i have the shares in my DEMAT account .

How exchanges will know whether this selling is legitimate or not?

Its DP(ZERODHA) who checks the share in your demat account. That’s why we fill POA(power of attorney) to zerodha(DP) so that they can debit the shares from our demat account without CDSL AUTHORISATION & OTP. So, actually on BTST the shares are already held with zerodha so the BTST became valid.

Ur answers are making a lot of sense!!!


Will keep posting some basic queries and i will look forward to ur reply!!!

No Problem…
Will always help you regarding your upcoming queries.