Short Selling!

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gd.shepherd

Member
#1
#1
I am trying my luck at trading equities in the Indian market. I tried trading Forex market and commodities but all of those trades are leveraged and markets are wild as news keeps breaking out every now and then.

But I think our stock market is inherently biased as individual speculators (of course retail traders are allowed to go short) are not allowed to hold short positions longer than a day forcing many people to only own long positions. This leaves people to go short for intra-day which is mostly a losing proposition. Also I feel this might be responsible for most stocks at very high prices especially IT stocs. Do other members have any views on this?
 
A

amlearning

Member
#2
#2
gd.shepherd said:
I am trying my luck at trading equities in the Indian market. I tried trading Forex market and commodities but all of those trades are leveraged and markets are wild as news keeps breaking out every now and then.

But I think our stock market is inherently biased as individual speculators (of course retail traders are allowed to go short) are not allowed to hold short positions longer than a day forcing many people to only own long positions. This leaves people to go short for intra-day which is mostly a losing proposition. Also I feel this might be responsible for most stocks at very high prices especially IT stocs. Do other members have any views on this?
Click to expand...
I think you can hold short position in future contracts without any limitation of time duration.
 
G

gd.shepherd

Member
#3
#3
Futures and options as I understand are time bound. They have expirations. Today I lost around Rs 1600 shorting Hotel Leela. My analysis of the stock is that they have debt and interest cover has waned, so it was a good reason to go short. There was shorts recovery and market moved up higher.

I am trying to learn about futures. But futures look risky as the potential scope for loss is more. Also today the there was futures expiration date and market was volatile. Though I remembered two days ago, I forgot and jumped in today.
 
M

MichealFlether214

New Member
#4
#4
I don't really agree with you point of view of market being biased. Its not really like that. We all have the opportunity to do hold the position for long, but it requires much indelpth analysis.
 
G

gd.shepherd

Member
#5
#5
MichealFlether214 said:
I don't really agree with you point of view of market being biased. Its not really like that. We all have the opportunity to do hold the position for long, but it requires much indelpth analysis.
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That's precisely what I meant by biasing. A market participant should be able to choose his position. By allowing only intraday short positions, the participants (the individual investors) are always forced to buy securities to hold them even if the timeframe is higher than the settlement date. I am afraid this develops the mentality of buy and hold.
 
A

aryan.

Active Member
#6
#6
gd.shepherd said:
My analysis of the stock is that they have debt and interest cover has waned, so it was a good reason to go short. There was shorts recovery and market moved up higher.
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Share price does not fall just because a company has debt or if the interest cover has waned.

Looks like your analysis was wrong and the market punished you.
 
T

TraderDude

Banned
#7
#7
gd.shepherd said:
Futures and options as I understand are time bound. They have expirations. Today I lost around Rs 1600 shorting Hotel Leela. My analysis of the stock is that they have debt and interest cover has waned, so it was a good reason to go short. There was shorts recovery and market moved up higher.

I am trying to learn about futures. But futures look risky as the potential scope for loss is more. Also today the there was futures expiration date and market was volatile. Though I remembered two days ago, I forgot and jumped in today.
Click to expand...
I would suggest you look at options. your risk can be limited and you can put additional protection by setting SL.

But then again setting SL is top priority in any kind of trading.
 
SavantGarde

SavantGarde

Well-Known Member
#8
#8
Good Shepherd,

There is 'Stock Lending & Borrowing' (SLB) mechanism in place... Please ask your broker how you can make use of it.... for shorting Stock for Longer Periods than just a day....

SG

gd.shepherd said:
I am trying my luck at trading equities in the Indian market. I tried trading Forex market and commodities but all of those trades are leveraged and markets are wild as news keeps breaking out every now and then.

But I think our stock market is inherently biased as individual speculators (of course retail traders are allowed to go short) are not allowed to hold short positions longer than a day forcing many people to only own long positions. This leaves people to go short for intra-day which is mostly a losing proposition. Also I feel this might be responsible for most stocks at very high prices especially IT stocs. Do other members have any views on this?
Click to expand...
 
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G

gd.shepherd

Member
#9
#9
aryan. said:
Share price does not fall just because a company has debt or if the interest cover has waned.

Looks like your analysis was wrong and the market punished you.
Click to expand...
The stock is trading at 31.30 near to the recent low of 30.55 as of yesterday. Realty stocks, Banking is suffering because of debt levels. I believed if the debt levels are high, creditors get the priority rather than stock holders. This was view which did not hold.

I am better off using NSE options rather than shorting individual stocks. SLB is costly for small investors and I happened to read on the web that it has generated less interest.


Shepherd
 
A

aryan.

Active Member
#10
#10
gd.shepherd said:
I believed if the debt levels are high, creditors get the priority rather than stock holders. This was view which did not hold.
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No offense dude but you should seriously stop trading and learn the basics of TA. You dont go short just because a company has high debt levels.
 
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