Short selling derivatives - Possible in Indian markets?

#1
Hi,
Pardon me if this sounds basic, but can we short sell Derivatives which we don't own using margin money (intraday basis) ? (Just like stocks)

Futures - I short sell some 75 lot of say Nifty 8000 seeing price coming down

Options - in case of options, lets say i wish to sell some Nifty 8000 CE call options (which i don't own using margin money), expecting market to come down - I know, i can buy puts if i expect market to come down, but lets understand it from short sell perspective, hence saying call.

Also, what happens if we don't square off - since it is margin money, does that also get auto-square off?
Kindly help.

Thanks You :)
 

travi

Well-Known Member
#2
Hi,
Pardon me if this sounds basic, but can we short sell Derivatives which we don't own using margin money (intraday basis) ? (Just like stocks)

Futures - I short sell some 75 lot of say Nifty 8000 seeing price coming down

Options - in case of options, lets say i wish to sell some Nifty 8000 CE call options (which i don't own using margin money), expecting market to come down - I know, i can buy puts if i expect market to come down, but lets understand it from short sell perspective, hence saying call.

Also, what happens if we don't square off - since it is margin money, does that also get auto-square off?
Kindly help.

Thanks You :)
You can short sell any derivative (provided your trade is accepted) and hold it upto expiry.
Conditions for Margin money depend on:
1. Most brokers allow you to select Trade as MIS(Intraday) which auto-square-off at 3:10-3:20pm and NRML which can be carried overnight or extended period.
During trading hours, you can switch b/w them for a trade too.

2. Both transactions have a different margin requirement that you need to comply to.

3. As long as you meet any margin requirement, your position will be open.
 

MDK

New Member
#3
Hi,
Pardon me if this sounds basic, but can we short sell Derivatives which we don't own using margin money (intraday basis) ? (Just like stocks)

Futures - I short sell some 75 lot of say Nifty 8000 seeing price coming down

Options - in case of options, lets say i wish to sell some Nifty 8000 CE call options (which i don't own using margin money), expecting market to come down - I know, i can buy puts if i expect market to come down, but lets understand it from short sell perspective, hence saying call.

Also, what happens if we don't square off - since it is margin money, does that also get auto-square off?
Kindly help.

Thanks You :)
Derivatives are meant for this you can go short in both futures and options - either intraday or positional till expiry day

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