"Going Short"

Discussion in 'Technical Analysis' started by marcus, Mar 24, 2006.

  1. marcus

    marcus Active Member

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    From what I understand "going short" is a technique used to make a profit on a bear run, in which you "borrow" stock from a broker and then sell this stock in the market, just b4 the trend reverses you buy back the stock at a lower price retain the profit and return the original stock back to the broker.

    My question is has anyone actually ever done this?

    Can you borrow stock from any of the internet trading sites like I-direct, indiabulls etc ........for short selling ??


    :D
     
  2. ivanboesky

    ivanboesky Active Member

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    In India, there is no mechanism yet for stock lending or borrowing... Short-selling is permitted intra-day, but you cannot carry a short position forward over a period of more than a day.
     
  3. Agilent

    Agilent Member

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    Looks like you are relatively new to the markets

    In which case, I suggest you get more experience making money by being long , b4 attempting short sales.

    Latter can (in theory ... rarely in practice) lead to far higher losses (in the absence of stock lending) as the shares u will try to buy back may simply be 'unavailable' .

    A safer way is to buy puts in the F&O side (hope u know what that stands for), but for that also, u need to first gather more experience trading in the cash segment

    Happy Trading
    AGILENT:cool:

    PS Short sales were freely allowed in the good ol' days of Badla , in the 80's, of course in BSE's A Grp list only. Short sellers used to earn a fortnightly 'badla' fee in addition to seeing their scrips fall in value ...
     
  4. dmtrader

    dmtrader New Member

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    Hello,

    shorting stocks can be very profitable; however, not for the faint of heart. There are tighter margin requirements involved with shorting and the potential losses are staggering (since theoretically, there is no limit to how high a stock can go).

    Short squeezes are also common - especially if you are trading a stock with a small float.

    You can find some "idea stocks" for shorting by looking at the "new downtrend" and "continued downtrend" daily signals at http://www.dmtrend.com. This site uses Directional Movement analysis (developed by Welles Wilder) to identify trending stocks.
     
  5. marcus

    marcus Active Member

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    Oh thanx, yes I'm new to the street. As of now I only do cash, as I've read its best to stay away from F&O till I gain more experience.

    Thing was a lot of ppl used to talk about a stock being good for "going short" when bearish, used to wonder what they were talking about.

    So I suppose theres no other way to profit on bearish stock, other than going short which as you all have kindly pointed out is not possible in India.
     
  6. Agilent

    Agilent Member

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    I mean seeing ( with glee ) their short-sold scrips (fall in value) ..

    Good luck
     

  7. sudoku1

    sudoku1 Well-Known Member

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    SGX trapped d morning shorts !!
     
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  8. timepass

    timepass Moderator

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    How come ??
     
  9. sudoku1

    sudoku1 Well-Known Member

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    it was down abt 40 points
     
  10. timepass

    timepass Moderator

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    Yup. And now Reliance results have not had much effect. Let's see what tomorrow brings :)
     
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