Trading of mutual funds using online trading platforms

highflier82 · #1 4th October 2008, 11:10 PM

Hello fellow Traderjis,

I am new to the markets and am considering trading an index fund, specifically one that tracks the SENSEX. My primary reason for this is that, to start with, I believe that it'd be easier for me to keep on top of the movement of the index and the factors influencing it, than it'd be for me to watch and analyze individual stocks. I would have just picked an index fund and traded it through the fund manager's website, but I would also like the ability to short sell units of the fund, and this, as I understand, would not be possible through a fund manager. Are there online trading platforms/brokers that allow trading of mutual fund units and also short selling of the same? If so, could someone enlist a few for me? If such brokers don't exist would anyone have suggestions as to how I can proceed given my objectives?

Thank you in advance for your help.

Varun

AW10 · #2 7th October 2008, 02:32 AM

Good to start with Index. You can not short index thru mutual funds.
If you spend time in understanding the risk management, then this is possible to short INDEX futures. You can use NIFTY futures and go long/short on that. Remember in Index fund does not reflect Index 1:1.. they selectively invest in the stock scrips in different proportion. So you can't do technical analysis on their NAV,find support/ resistence levels etc.

Good strategey, but in my view, the instrument does not meet the requirement.

Happy Trading

highflier82 · #3 7th October 2008, 08:04 PM

Quote:

Originally Posted by AW10

Good to start with Index. You can not short index thru mutual funds.
If you spend time in understanding the risk management, then this is possible to short INDEX futures. You can use NIFTY futures and go long/short on that. Remember in Index fund does not reflect Index 1:1.. they selectively invest in the stock scrips in different proportion. So you can't do technical analysis on their NAV,find support/ resistence levels etc.

Good strategey, but in my view, the instrument does not meet the requirement.

Happy Trading

Is it not possible to short mutual fund units even through brokers?

Thanks.

Varun

AW10 · #4 8th October 2008, 12:02 AM

To the best of my knowledge, NO. You can't short mutual fund.
ETF (exchange traded funds) could be an alternative. They offer the diversification of mutual fund and trading advantage of a stock (not to mention lower transaction fee)

You can short ETFs. NIFTYBEES/ JUNIORBEE are ETFs on nifty. I am not sure about their liquidity, fee etc. so please do your research before putting money on them.

Happy Trading

highflier82 · #5 8th October 2008, 08:12 PM

Thank you for your input, AW10.

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highflier82 (7th October 2008)