SHORT Selling

[212DegreeCent]

Hi Guys,
This forum was always helpful for me. Thanks a lot.
There will be Short Selling from Feb onwards. Anybody know what is the eaxct meaning of this? Why this is intriduced now? How it is going benifit or harm market?

Thanks a lot
Regards
212D-Cent

 

[musicjunkie]

Hello Degree!
Short selling in very simplistic terms means that you are bearish on a stock. Say wiprofro is at 500Rs and you think it will go down to say 450 so you put a short order. Now when the price declines you COVER your short at 450 and pocket the 50 rupees! so if you had 500 shares then you made a profit of 25,000 from the decline

Now about effects it will have on the market. for your info we had short selling a few years ago but due to a scam it was banned, personally i am very happy short-selling is being introduced . Shorting will and should bring some equilibrim in market but thats just theoretical, markets will ALWAYS move in the line of least resistance as said by Jesse Livermore.....
hope i answered the question and didnt end up confusing you
MJ--

 

[sudoku1]

Hi Guys,
This forum was always helpful for me. Thanks a lot.
There will be Short Selling from Feb onwards. Anybody know what is the eaxct meaning of this? Why this is intriduced now? How it is going benifit or harm market?

Thanks a lot
Regards
212D-Cent

The selling of a security that the seller does not own, or any sale that is completed by the delivery of a security borrowed by the seller. Short sellers assume that they will be able to buy the stock at a lower amount than the price at which they sold short.

Selling short is the opposite of going long. That is, short sellers make money if the stock goes down in price.

This is an advanced trading strategy with many unique risks and pitfalls. Novice investors are advised to avoid short sales until fully acquinted with the risks attached......

 

[WildFire]

Retailors already have shorting and they have been doing it. What i heard is that now corporates or the non-retailers can also do short in the market from Feb1. I assume what i heard is right.

A general question about shorting: Do we need to square off all shorting on the same day (in equities)? example if i short 100 shares today should i buy that n the same day of can i do it after say 5 days?

 

[sillu_m]

Retailors already have shorting and they have been doing it. What i heard is that now corporates or the non-retailers can also do short in the market from Feb1. I assume what i heard is right.

A general question about shorting: Do we need to square off all shorting on the same day (in equities)? example if i short 100 shares today should i buy that n the same day of can i do it after say 5 days?

you have to square off the same day, if not then huge loss.

 

[gvgs98]

While shorting do we need to pay margin, brokerage and STT etc. on both sides of transaction?

TIA
VG

 

[paddy1005]

Some basic Qs on Short Selling -

1- Is there any special requirement other than dmat a/c,bank a/c through which i normally purchase or sell ?
2 - As i have to square off the share same day,If i can not for obvious reasons that share jump up very high.whats the fine/charge/fee/penalty.
3 - Whats the brokerage for short selling ?

Paddy

 

[suba_stocks]

Some basic Qs on Short Selling -

1- Is there any special requirement other than dmat a/c,bank a/c through which i normally purchase or sell ?
2 - As i have to square off the share same day,If i can not for obvious reasons that share jump up very high.whats the fine/charge/fee/penalty.
3 - Whats the brokerage for short selling ?

Paddy

any one who can buy shares...can sell short..(all local indian citizens )

if you don't square off on the same day ...shares will be bought in auction and you are fined by 20 percent of the high price of that stock on that day.

auction price ..+ 20percent of stocks high price of that day ...is the amount you need to pay ..obviously you will end up with huge loss.

safe method is ........you own 100 shares of rpl in your dp...you can sell them off with normal order ...(shorting ) ...if price jumps too high ..u leav your shares ..that is let it go on delivary. later you can buy back share when you find good price again on any day and take delivary of those share..

all in all ...just know ...go short on number of shares you own in your dp.
this will protect you if price jumps too high on that day.

also ...minor loss to buying back is need to be consider...some times taking small loss is worth than losing shares in dp.

regards
suba

 

[uasish]

Retailors already have shorting and they have been doing it. What i heard is that now corporates or the non-retailers can also do short in the market from Feb1. I assume what i heard is right.

A general question about shorting: Do we need to square off all shorting on the same day (in equities)? example if i short 100 shares today should i buy that n the same day of can i do it after say 5 days?

The main intention of introducing this variety is you can Hold your Short positions ,as we can in Futures Mkt.Here a Stock Lending institute will come into picture,who will lend us those Scrips so that i can deliver those scrips (which when i shorted the person who bought has to get the scrip in his demat).
This Lender would obviously give that service ,for fees & full / partial monetary amount gaurantee provided to them from my cash.
After some time i repurchase those scrips from the mkt & give back to the lender who inturn will credit back the amount witheld by them deducting interest & charges.
The Sell should attract all govt tax & other charges as is presently in force.

 

[Linus]

Please read this article.

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