What is Trade to Trade (T2T) Segment in Stock Exchanges?

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What is Trade to Trade T2T

Discussion Topic: Trade to Trade (T2T) 


Many of our readers send us requests that they want to know more about the Trade to Trade (T2T) Segment of Stock exchanges (both BSE and NSE). So, we decided to write an article to describe everything about the Trade to Trade Segment (T2T segment of BSE and NSE).

What is Trade to Trade Segment (T2T Segment)? 


Trade to Trade (T2T) settlement is a segment of BSE and NSE where no intraday trading is permitted. That means shares under this T2T segment can be only be traded (buy or sell) on a delivery basis.

This is one of the methods stock exchanges use to curb the speculative trading or to counter the intentional market manipulation done by frequently trading a stock by some groups of traders.

Transaction done in this segment has to be settled in a gross basis. The settlement of stocks that are listed in this segment is done on a trade for trade basis and no netting off is permitted within the same day.

Trade to Trade segment is also widely known as “Trade for Trade Segment”, T2T segment, or only “T segment”.

How The Stocks Are Moved to/from T2T Segment: 


There are certain criteria set by stock exchanges and SEBI (Securities and Exchange Board of India) for each of the companies traded on the stock exchange. Violating those terms can result in a stock to be moved to T2T Segment.

A general rule is that, as on the review date, the stock should have been within the 5% price filter band (circuit filter) for at least 22 trading days. If a scrip doesn't meet these criteria, it cannot be moved from the “T2T” segment.

Effect of Moving a Stock to the Trade to Trade Segment: 


In this T2T segment, no speculative or intraday trading is permitted.

Delivery of shares and full payment of the consideration amount are mandatory.

Each and every trade has to result in a delivery, even if you have purchased and sold the shares within the same settlement cycle (BTST).

As a summary - if you are considering to trade in the ‘Trade to Trade" segment:

  • If you buy shares, you have to pay the full amount and take delivery.
  • If you sell shares, you have to give the delivery of shares and then after you will get the money.
  • No same-day netting off is allowed, which means, if you buy today and also sell today, your sell position will go in to auction instead of squaring-off your buy position. This is because you will not be able to give delivery and hence, you will have to pay a very heavy penalty.

Where Can I Get the List of T2T Stocks? 


For a list of NSE T2T shares, Follow the below URL and then expand the “Current Market Reports” and see the list under “Securities in Rolling (EQ) and Trade for Trade (BE,BT)”.

https://www.nseindia.com/products/content/equities/equities/equities.htm

For a list of BSE T2T Shares, Follow the below link:

http://www.moneycontrol.com/stocks/bse-group/t-group-companies-list.html

Should I Invest in Stocks in “Trade to Trade” Segment? 


As described above, the trade volume in those T-Segment scrips is, therefore, all delivery volume. So, a high delivery volume could mean that a large number of investors are willing to buy and hold that particular stock.

Though the description of T2T segment sounds bad, it's not that bad in nature. In fact, you are protected from speculation traders and disruptive price movements.

 

We hope that you have enjoyed the above article describing the trade to trade segment of BSE and NSE. Be with us to explore forex trading, stocks trading, and other money-making opportunities.

Leave us some comments if you have any questions or doubts about the T2T segment or how this works, we will be happy to make your understanding clear.

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