When trading in the stock market using platforms like Zerodha, new investors often come across terms and abbreviations that may seem confusing at first. One such term is T1 Qty, which appears in the holdings section of the Zerodha Kite interface. Understanding what T1 Qty means is important for anyone actively buying and selling stocks. It impacts how you view your portfolio, plan your next trade, and understand settlement timelines. Let’s explore the concept of T1 quantity in detail, how it fits into Zerodha’s trading system, and what implications it has for retail traders.
Understanding T+1 Settlement Cycle
To fully grasp what T1 Qty means, you need to understand the settlement cycle in the Indian stock market. When you buy shares on a trading day (T), those shares do not instantly reflect as available in your demat account. The exchange follows a T+1 settlement cycle, which means that the shares are credited to your demat account one trading day after the transaction date.
For example, if you buy a stock on Monday (T), it will be settled and delivered to your demat account on Tuesday (T+1), assuming both days are trading days. During this time, the shares you purchased will not yet be part of your Holdings but will appear under a different category.
What Does T1 Qty Mean in Zerodha?
T1 Qty stands for Trade Day Plus One Quantity. It refers to the number of shares that you have bought but have not yet been delivered to your demat account because the settlement cycle is still in process. These shares are in transit between the exchange and your broker and will be credited to your holdings on the next trading day.
In Zerodha’s Kite platform, if you purchase 100 shares of a company today, those 100 shares will reflect as T1 Qty under the Holdings tab. On the next trading day, once the settlement is completed, these shares will move from T1 Qty to your actual Holdings.
Why Is T1 Qty Important?
The concept of T1 Qty is significant for several reasons:
- Tracking Recent Purchases: It helps you monitor the stocks you’ve recently bought and are waiting to receive.
- Portfolio Management: T1 Qty allows you to distinguish between fully settled stocks and those still pending settlement.
- Planning for Trades: Knowing which shares are in T1 status helps you plan your intraday or delivery-based strategies accordingly.
Can You Sell T1 Qty Shares?
Yes, Zerodha does allow you to sell T1 Qty shares before they are credited to your demat account. This is referred to as BTST (Buy Today, Sell Tomorrow) trading. Under the BTST mechanism, you can sell shares that you bought on the previous trading day, even though they haven’t yet reached your demat account.
However, BTST trades come with some level of risk. Since you are selling shares you technically do not yet own, there is a possibility of short delivery if the shares you bought are not successfully delivered due to any reason (such as auction settlements or seller defaults). In such cases, your broker may need to purchase the shares from the open market to meet your sale obligation, potentially resulting in losses.
How to View T1 Qty in Zerodha Kite
You can easily find your T1 Qty in the Zerodha Kite app or web platform:
- Log in to your Zerodha Kite account.
- Navigate to the Holdings tab.
- Look for a stock that you have recently purchased.
- You will see a column or section labeled as T1 Qty showing the number of shares pending settlement.
This layout helps users visually separate their settled holdings from the unsettled ones.
Difference Between T1 Qty and Holdings
It’s crucial to differentiate between the two:
- T1 Qty: Represents shares bought on the previous trading day, not yet settled, and still in transit.
- Holdings: Refers to shares that have completed the T+1 settlement and are now available in your demat account.
Once the shares from T1 Qty are settled, they will move to the Holdings section. This movement is automatic and happens at the backend, without requiring any action from the trader.
Common Issues with T1 Qty
Although Zerodha’s system generally works smoothly, users sometimes face confusion or issues with T1 Qty. Here are a few common concerns:
1. T1 Qty Not Showing in Holdings
Some users worry when they don’t see T1 Qty immediately after placing a buy order. Usually, this is due to the trade still being in processing. It may take a few minutes or hours, especially if the trade occurred late in the trading day.
2. Delay in Settlement
While the market follows a T+1 settlement cycle, occasional delays can happen due to holidays, market volume, or technical issues. It’s important to wait until the next trading day before escalating the issue.
3. BTST Risks
As mentioned earlier, selling shares from T1 Qty is allowed but not without risk. It’s important to consider the volatility of the stock, potential delivery failures, and other market conditions before executing a BTST trade.
Tips for Managing T1 Qty Effectively
- Monitor Holdings Regularly: Always check both Holdings and T1 Qty before placing new orders, especially if you’re planning BTST trades.
- Avoid BTST in Illiquid Stocks: Thinly traded stocks are more prone to delivery issues and price manipulation.
- Use Alerts: Zerodha allows setting alerts for stock movements. Use this feature to track the performance of T1 stocks.
- Wait for Settlement if Unsure: If you are new to trading, it’s safer to wait until shares are fully settled in your demat account before selling them.
Does T1 Qty Affect P&L (Profit and Loss)?
Yes, the value of T1 Qty is included in your unrealized P&L calculations in Zerodha. It reflects the market value of your recently purchased shares even if they are not yet part of your official demat holdings. However, until the shares are fully settled, you cannot pledge them for margin or use them for collateral.
T1 Qty in Zerodha is an essential concept for traders and investors, especially those who actively buy and sell equities. It represents the quantity of shares that have been purchased but not yet settled into the demat account due to the T+1 settlement cycle. Understanding how T1 Qty works helps you manage your holdings better, avoid trading mistakes, and make informed decisions. Whether you’re a beginner or an experienced trader, staying aware of the distinction between T1 Qty and actual holdings can greatly enhance your trading experience on Zerodha’s Kite platform.