What are the risks involved in BTST?

BTST (Buy Today Sell Tomorrow) - Trades where the shares are bought and sold on the next trading day, i.e. T+1 day. The risk with BTST trades is that since the clients are selling shares that aren't in their demat account yet, they rely on the seller they’ve bought the shares from to give them the stock. If the seller defaults on giving them the shares, i.e. in the event of short delivery, the client’s obligation as a seller to deliver shares won't be met, and the clients will face the risk of auction penalty, which can be up to 20% of the value of stock short delivered. To learn more about short delivery, see What is short delivery and what are its consequences?