Sell Today Buy Tomorrow (STBT) Strategy: A Smart Trading Tactic for Bearish Markets

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Edited by Saibal Bose

Sell Today Buy Tomorrow (STBT) Strategy: A Smart Trading Tactic for Bearish Markets

Introduction

Sell Today Buy Tomorrow (STBT) is a short-term trading strategy primarily used in the futures and options (F&O) segment of the Indian stock market. In STBT, traders sell a stock or an index future today with the expectation of buying it back at a lower price the next day. This approach is the reverse of the popular “Buy Today Sell Tomorrow” (BTST) strategy and is mostly utilized when a bearish sentiment is anticipated in the market.

How Sell Today Buy Tomorrow (STBT) Works

• Sell Today: You sell a stock or index futures today based on bearish technical indicators or news.
• Buy Tomorrow: You aim to repurchase the same quantity tomorrow at a lower price, booking the difference as profit.

This strategy is generally employed by experienced traders who can anticipate short-term downtrends using technical analysis, market news, or global cues.

Key Features of Sell Today Buy Tomorrow (STBT)

• ✅ Only available in the Futures segment (not allowed in cash market).
• ✅ Works best in volatile or falling markets.
• ✅ No delivery obligation, since positions are squared off the next day.
• ✅ Leverages margin trading and intraday indicators.

Ideal Conditions for Sell Today Buy Tomorrow (STBT)

• Weak global cues or overnight negative news.
• Stocks showing breakdowns on technical charts.
• Sectoral weakness or negative earnings reports.
• High open interest with declining price — indicates short buildup.

Advantages of STBT

• Potential to make profits in falling markets.
• Requires low capital due to leverage.
• Quick turnaround time (24 hours or less).
• Helps hedge existing long positions.

Risks Involved

• If the market opens gap-up, losses can be high.
• Margin requirements can increase due to volatility.
• Not suitable for beginners due to higher risk.
• Restricted to F&O stocks only.

FAQs on Sell Today Buy Tomorrow (STBT)

Q1. Is STBT allowed in the cash/equity market?
🔹 No, STBT is not permitted in the cash segment. It is only applicable in the F&O segment.

Q2. How is STBT different from short selling?
🔹 STBT is a form of short selling but specifically refers to holding the short position overnight and covering it the next day.

Q3. Can I use STBT in options trading?
🔹 While STBT is mainly used in futures, advanced traders can implement a similar bearish strategy using options (e.g., buying puts or selling calls).

Q4. Is there any penalty for using STBT?
🔹 No penalty if done within F&O guidelines. However, margin requirements must be met.

Q5. Which traders use STBT?
🔹 Primarily used by professional and technical traders who anticipate short-term bearish movements.

Popular Stocks for STBT in India

• Nifty and Bank Nifty Futures
• Reliance Industries
• HDFC Bank
• Infosys
• Tata Steel
  (Note: Stocks must be F&O eligible)

Conclusion

Sell Today Buy Tomorrow is a powerful strategy for bearish markets, offering traders a way to profit from falling prices. However, like any leveraged trading approach, it demands discipline, research, and risk management. STBT is best used by seasoned traders familiar with futures trading and market dynamics.

Tags

#STBT #SellTodayBuyTomorrow #FuturesTrading #StockMarketIndia #ShortSelling #IntradayTrading #BearishStrategy #TradingTips #NiftyFutures #FOTips

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