Short selling

#11
My dear Marcus,

as aca_trader mentioned in his first reply "short selling" isn't allowed in Indian excahanges just yet. Again, as aca-trader mentioned in a later post ICICIDirect does allow short selling intra-day. Here I would like to add that this is allowed only in the Margin Trading segment & not for delivery trades. This is offered by almost every broker conceivable in India, meaning that they offer multiple exposure on your trading capital for intra-day margin trading. These trades, both long or short are in the daily settlement category & have to be squared off by end of day. No deliveries to & from your de-mat account are involved.

Gist of it is.......Intra-day Margin Trading allows short selling of scrips even though your de-mat account is devoid of the stock. This essentially means you are allowed to borrow stocks to sell..........munchikana has put this in very good perspective.
 
#12
Hi marcus
Short selling in theory means you borrow stock and sell. That means you have to buy it back from the market and return to your lender. The funny aspect (if you think so) on this side is that you get maximum benifit if the stock goes down after you short sell. However the entire game can turn deadly if the market goes against you and the stock which you shorted goes up. If you decide to short, then do proper homework. I mean proper analysis and choose the stock in a downward move to short. Do not forget to workout stop loss level before shorting. That will minimise your losses in case stock moves up. Stop loss must be honoured religiously. There can be no second argument on this aspect. Further, you are not allowed to carry over your short position in cash section overnight. You must cover your short position before the closure of the market. If not, your position will go for auction and you will have to pay penalty, which invariably means you will have to pay through your nose. Your broker will get negative marks from the exchange. I have been told that if the clients do not honour their commitments, their brokers too get negative marks from the respective stock exchanges. That invariably means, your relationship with your broker will turn sour. Carrying overnight short position is permitted on the F& O side. But if the market gaps up in the next day openining and moves further up, you will be hurt badly. Unless you are an expert on the market moves and technical analysis of stocks, my sincere advise to you is not to short. Hope this reply clears all your doubts
HI.
I have a query, i did a shortselling today and i could not but the same.,
because the stock was upper freeze, so wat will happen to my short position""?
 

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