What Is Trade-To-Trade Segment?
Brokers watch their screens during trading hours inside a dealing room. (Photographer: Abhijit Bhatlekar/Bloomberg News)

What Is Trade-To-Trade Segment?

This is a series of explainers to educate and inform new investors. In association with Dun & Bradstreet India as knowledge partner.

Trade-To-Trade Segment: Definition, Meaning & Basics

Trade-to-Trade segment is a segment in which shares traded on a stock exchange are settled on a gross basis and not on net basis. It is a segment where shares can be traded only for compulsory delivery basis. It means Trade to Trade shares cannot be traded intraday.

In this segment each share purchased or sold has to be taken delivery by paying full amount. This effectively means that every share traded in this segment needs to be delivered separately and payment for the same also should be made without netting of buy against sell transactions.

Stock exchanges categorise shares in and out of this segment periodically in consultation with market regulator SEBI. The process of identifying the securities moving to Trade-to-Trade segment is done on a fortnightly basis while securities moving to/from Trade-to-Trade is done on a quarterly basis. This is done based on criteria such as price to earnings ratio, price variation and market capitalisation.

The scrips or shares in the Trade-to-Trade segment are made available for trading under BE series on NSE. BE stands for Book Entry.

Visit the Financial Terms section for more.

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