I always struggled in position sizing and controlling risk in swing shorts, as one can only carry shorts in futures (lot size is humungous in rupee terms and uneven, fixed). Unlike longs, it's almost impossible to keep risk at 1% in all short trades with exact position sizing.
Simple answer I found for above problem is to long the excess quantity in cash, so if I want to short sell 100 shares of a script whose future lot is 500, I can be long 400 shares in cash and one lot short in futures (entring both positions simultaneously).
There can be slight difference in case there is a relative movement between future price and spot price.
Stock Options are not an option for me, they are illiquid many a times and difficult to get out of.
Will be a bit capital intensive but will solve the problem.
Was common sense afterall, but came late into my mind.
Simple answer I found for above problem is to long the excess quantity in cash, so if I want to short sell 100 shares of a script whose future lot is 500, I can be long 400 shares in cash and one lot short in futures (entring both positions simultaneously).
There can be slight difference in case there is a relative movement between future price and spot price.
Stock Options are not an option for me, they are illiquid many a times and difficult to get out of.
Will be a bit capital intensive but will solve the problem.
Was common sense afterall, but came late into my mind.