Short selling

marcus · #1 26th May 2006, 04:17 PM

Can anyone tell me if i can do "short selling" in the cash segment and which online brokers allow this?

Many thanks.

ganeshhity · #2 26th May 2006, 04:37 PM

Quote:

Originally Posted by marcus

Can anyone tell me if i can do "short selling" in the cash segment and which online brokers allow this?

Many thanks.

Short selling is generally used in falling market....... you sell at thing at higher price and purchase it at lower price....u get the difference amount and not the stocks....and if the prices go up after shortsell, u pay the difference...

ganeshhity

aca_trader · #3 26th May 2006, 05:41 PM

Quote:

Originally Posted by marcus

Can anyone tell me if i can do "short selling" in the cash segment and which online brokers allow this?

Many thanks.

Short Selling in the cash segment is not allowed in India as of Now.

Regards,
--Ashish

munchikana · #4 26th May 2006, 06:15 PM

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

marcus · #5 26th May 2006, 06:34 PM

Quote:

Originally Posted by munchikana

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

Thanks aca trader and gaaneshitty for your kind replies.

Munchikana You've said if i go short in the cash segment I cannot I must buy back the same day ie before the session closes. Could you tell me which online broker allows this. ICICI does not I asked them if i simply give a sell order without having the securities and then buy back a little later before the markets close that way before the end of the day I'd have the securities which can be given to the person I sold to a few hours earlier, however they said this is not allowed. Do you know an online broker who permits this.

Thanks again to all

aca_trader · #6 26th May 2006, 08:00 PM

Quote:

Originally Posted by marcus

Thanks aca trader and gaaneshitty for your kind replies.

Munchikana You've said if i go short in the cash segment I cannot I must buy back the same day ie before the session closes. Could you tell me which online broker allows this. ICICI does not I asked them if i simply give a sell order without having the securities and then buy back a little later before the markets close that way before the end of the day I'd have the securities which can be given to the person I sold to a few hours earlier, however they said this is not allowed. Do you know an online broker who permits this.

Thanks again to all

In Intraday Trade, all the brokers allow short-selling. I have done this myself with ICICIDirect & INdiabulls. Unfortunately, their customer care executives always say that it's not possible. When beforing opening Demat Account with them, I asked them the same question, the reply was negative. However, when I insisted, they brought their TL on the line who had an idea of the process and said that it can be done. Later I used it during the 1st week of my trade itself.

Earlier I thought that u were talking about shorting in the cash segment for trading spanning more than one day and hence replied in negative.

Best Regards,
--Ashish

marcus · #7 26th May 2006, 08:23 PM

Quote:

Originally Posted by aca_trader

In Intraday Trade, all the brokers allow short-selling. I have done this myself with ICICIDirect & INdiabulls. Unfortunately, their customer care executives always say that it's not possible. When beforing opening Demat Account with them, I asked them the same question, the reply was negative. However, when I insisted, they brought their TL on the line who had an idea of the process and said that it can be done. Later I used it during the 1st week of my trade itself.

Earlier I thought that u were talking about shorting in the cash segment for trading spanning more than one day and hence replied in negative.

Best Regards,
--Ashish

Dear Ashish,

Thanks for the reply last question is do I need any special permission or do I have to inform IDirect before I do this OR can I do it with "no prior notice" so to speak. You are correct in that the ppl at their call centre have told me twice this process even within the same day is not allowed & hence I was confused. Thanks again.

aca_trader · #8 26th May 2006, 08:33 PM

Quote:

Originally Posted by marcus

Dear Ashish,

Thanks for the reply last question is do I need any special permission or do I have to inform IDirect before I do this OR can I do it with "no prior notice" so to speak. You are correct in that the ppl at their call centre have told me twice this process even within the same day is not allowed & hence I was confused. Thanks again.

No Prior notice to this effect is required to be given by the constitunet to the member of the stock exchange. The member is bound to provide this facility to the constinuent per its agreement with the stock exchange.

In common english, you need not obtain any special approval or need not intimate ICICIDirect.com about your intentions of selling short beforehand.

Best Regards,
--Ashish

marcus · #9 26th May 2006, 10:35 PM

Quote:

Originally Posted by aca_trader

No Prior notice to this effect is required to be given by the constitunet to the member of the stock exchange. The member is bound to provide this facility to the constinuent per its agreement with the stock exchange.

In common english, you need not obtain any special approval or need not intimate ICICIDirect.com about your intentions of selling short beforehand.

Best Regards,
--Ashish

Dear Ashish,

Thank you for your help. Thanks to everyone else as well. Much obliged.

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Quote:

Originally Posted by Finance Minister

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