but what if those shares get short delivered to you?? then T2 is wrong, is it not?
no, here as well T2 would simply suggest that with High probability one should get delivery of stocks towards the end of day (small probability of short delivery), and it is not to be shown as delivered
I understood what you are saying, but it is not possible for us to show that way as of now is what I am saying.
Hi @hihfhyu74,
Good question.
Tn basically says how many days back you have purchased the share. If one is hell bent on being spot on with the notation, just to include short delivery, there should be T3 as well. However, considering the low probability of a short-delivery happening and no difference in terms of cost incurred while selling T3 (short delivered) or delivered (realised) shares, they both can be clubbed as Delivered.
Hope this answers your question.
@siva, may I know what the difficulty is? It is definitely not the implementation difficulty I assume. Regarding it being more confusing, as even @bshubhranshu agrees, if at all anything, it would be more clear to the traders.
T1, T2 are commonly used market terminologies, they aren’t meant to indicate how many days prior your purchased the stock. They’re more a notation to denote whether the stocks being shown are delivered or not.
All stocks remain under T1 until the time that they are delivered after which they move into T2/demat holdings. Stocks under demat carry no risk of auction when you execute a sell transaction. When you buy shares on Monday and sell them on Wednesday, you still carry the risk of auction in the event that the Exchange doesn’t deliver stocks against your purchase and decides to settle the transaction by effecting a close-out.
Also, all brokers prepare/generate files on T-1 day for T day transactions. The T1 and the T2 files that you see on Wednesday morning are generated on Tuesday night at a time when the delivery isn’t settled yet. As a matter of fact, the delivery settlement for Monday’s purchase happens only on Wednesday at around 1.00 pm. If you want to know how many days prior you bought the stock, refer to the trade book.
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Hi @VenuMadhav,
Thanks for the clarification. So, let me get this clarified. Even if India had a settlement policy of T+5, you would have named it T1 and T2? - Coz n in Tn has no significance whatsoever?
It would be great actually if you can lead me to some material which says T2 means delivered. I do agree T2 means they will eventually be delivered by EOD, worst case tomorrow. But, I don’t quite agree that it means the shares which are already delivered.
Leaving that apart, l request you to add the feature that shows the number of shares available for BTST. Let me point out that there are brokers who show this number explicitly. Since Zerodha also promises to provide the ability to do BTST, could you at least add this (number of shares available for BTST)?
Hope this is neither against any prevailing convention nor is it confusing.
If anything, India is probably moving towards a T+1 settlement, so I wouldn’t want to talk of a hypothetical situation.
Talk to traders in the market and you’ll figure.
That’s exactly what stocks under T1 denote. As I’ve said earlier, there’s no guarantee that the shares that you’ve bought on Monday will get delivered on Wednesday. On Wednesday, the shares continue to show under T1 meaning they are undelivered.
→ If the shares get delivered on Wednesday, then they’re transferred to your account and then debited on Thursday (if there’s a sale transaction on Wednesday)
→ If the shares don’t get delivered on Wednesday and instead on Thursday through an auction payout, then your Wednesday’s sale obligation is met without transferring shares to your account in which case no dp charges apply.
→ If the shares don’t get delivered at all, and the Exchange settles your purchase transaction by crediting money, then your sale transaction gets short delivered resulting in an auction.
Thanks a lot @VenuMadhav.
Clears most of my doubts. However, I would still request you to show BTST shares separately. I do understand that you are basing your argument on the fact that the shares might not get delivered on Wednesday (T + 2). However, I am pretty sure that even you agree that the probability of it not getting delivered on T2 is quite slim. Why don’t we go a step further to show a difference between the shares bought a day earlier and the shares bought 2 days earlier? It would make the life of a trader who is considering BTST a lot more easier as it would save him from DP charges on most occasions than not.
When we build systems, they are meant to account into all sort of possibilities without really assessing the probability of an event.
Trade book can be referred, I’ll pass on your feedback though to our developers.
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Thanks a lot @VenuMadhav
I really appreciate your quick and clear clarifications.
I would be really happy and appreciate further if this feature gets implemented.
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