Temporary demat securities that signify your eligibility to apply for the rights issues are known as Right Entitlements (REs). The exchange permits trading in the REs and you can sell these just the way you sell stocks from your holdings. 

REs aren’t right shares themselves, and are required to be used to apply for the rights shares. If these are not sold or used to apply for rights, then they will lapse eventually.  

REs don’t reflect in your demat account until the RE trading period begins. 

Also note that you will not be allowed to transact REs intraday as they are settled on a trade-to-trade basis. 0.05% STT of the value of RE is charged on the seller of the RE.