What does t2t stocks meaning? “T+2 settlement” stock refers to equities which must be delivered before they may be exchanged. There is no way to trade these shares throughout the day or regularly because of this. Those who buy Trade 2 Trade equities now and wait for the T+2 settlement won’t be free to sell those until then. If you attempt to sell these shares on that day or when they are in the Demat account, your order will be rejected.

Exchanges and the Securities and Exchange Board of India (SEBI) work to monitor volatile or erratic stock prices. To protect normal investors from getting swept up in the market volatility and to minimize inappropriate speculation on such securities, they placed them in the T2T segment of the portfolio.

On a fortnightly basis, stock exchanges move companies into and out of the Trade to Trade sector based on quarterly assessments.

The key variables used to convert shares to the t2t stocks sector include, but are not limited to, price to profits overvaluation, price volatility, and market capitalization. Stocks that cannot be traded in the F&O division are also considered for transfer to the T2T sector.

Exchanges divide scripts into different series based on the type of instrument and the settlement method they are traded in. A separate series is kept for the Trade 2 Trade stocks. These equities may be found on both the NSE and BSE’s websites. Let’s check out the details of what is t2t stock.

T2T Stocks

A list of firms shifted to Trade-to–Trade Segment may be found by opening the Notices page on the BSE or NSE. It’s also known as the T2T segment, and the exchanges and SEBI often decide to move shares to this section.

The change to t2t trading is often seen as a way to reduce stock speculation. Since individual investors are susceptible to being trapped in the erratic price swings of volatile equities, the Securities and Exchange Board of India (SEBI) is constantly on the lookout.

What exactly is a stock trade? A mandatory delivery must accompany all purchases and sales in the T2T market. Intraday squaring of holdings on T2T equities is not authorized since it might lead to speculating in these stocks.

What Are The Criteria For Shifting The Stocks To The T2T Segment?

How to sell t2t shares? Trade-for-trade settlement of scrips is permitted in this sector, but no netting off is permitted. On this portion of the market, intraday trade is not allowed. Jointly even by Stock Exchanges, SEBI, and regularly, the criteria for transferring scripts to or from the Trade for Trade sector are determined.

Also Read: What is the Process to Start Commodity Trading?

Every week, the Trade for Trade section is identified, and the Trade to Trade segment is identified every quarter. Any securities, regardless of their price range, may benefit from this analysis. The following is a breakdown of the criteria for determining whether a security should be moved to the weekly Trade for Trade category. The securities that meet all criteria will be moved to the Trade for Trade section.

Price Variation

There is a minimum P/E of 25 as of the date in question for any price-earnings multiple (P/E) that is less than zero.

Market Capitalisation

As of the relevant date, there is a case for T2T shifting if the market cap is less than or equivalent to Rs 500 crore.

What Happens When A Stock Is Moved To The T2t Segment?

T2T transactions are the only ones allowed on a stock that has been moved to this section. There will be no intra-day squaring allowed since intraday trading does not include delivering a share of stock.

When you acquire stock through T2T trading, you must accept possession of the stock at the time of purchase. Put another way, and you must pay the stock’s EOD value. Otherwise, the broker would have to sell the shares on T+2 and deduct the loss from your account. The broker may punish you as well.

BTST & STBT are quite widespread in the brokerage sector. You either purchase and sell now, or you buy and sell tomorrow. In both circumstances, you’re taking a short-term risk on the company. T2T, on the other hand, does not allow for either BTST or STBT deals since all trades must ultimately end in delivery.

How To Trade In T2T Stocks

If a stock is traded on a delivery basis, it cannot be delivered on the same day it is exchanged. This kind of trading is called Trade to Trade (T2T). There is no intraday trading for T2T shares. Buying and selling stocks during the market hours of the same day is known as intraday trading.

Conclusion

There are certain advantages to the t2t segment, despite its difficulty. The T2T section at Nuuu protects the investor against price volatility and complete speculations by limiting the risk. Don’t forget to open a Demat with Nuuu if you plan on purchasing T2T shares.