Shorting a stock without futures

SwingKing

Well-Known Member
#1
Guys, lets say I need to short a stock (in the equities market and not in futures market). I can short sell a stock in intraday. But what If I have to short a stock which is not in my DP? Can I carry the position going forward? This is allowed in the US. But I have no clue how it works here.

Can anyone shed some light on this ???
 
#2
dear mr agarwal this prosess is called stbt sell today buy tomorrow..........this depends upon you broker.............generally you can remain short for one to seven days .....................your broker will block some money depends upon the stock which you are shorting..........i know this because........once i have shorted dlf in intraday and forgot to buy back........i paid them the scrip next day........my broker is india bulls.....when i trade with power india bulls ( their software) and choose......short selling in cash market.......a box appears which has two options a) sell shares in my dp

b)sell shares not in my dp


so this is possible.............you can mail any broker and ask them more ................. like how much money they are going to block
 

trader.trends

Well-Known Member
#3
Guys, lets say I need to short a stock (in the equities market and not in futures market). I can short sell a stock in intraday. But what If I have to short a stock which is not in my DP? Can I carry the position going forward? This is allowed in the US. But I have no clue how it works here.

Can anyone shed some light on this ???
Raunak
Some brokers allow shorting of stocks not in DP. Indiabulls allows this. You have to have a higher margin for this and you have to square it within T+2 days. Since it differs from broker to broker, you need to check with your broker.
 

SwingKing

Well-Known Member
#4
Raunak
Some brokers allow shorting of stocks not in DP. Indiabulls allows this. You have to have a higher margin for this and you have to square it within T+2 days. Since it differs from broker to broker, you need to check with your broker.
I have IndiaBulls as my broker. And I spoke to the guy today and got a very vague answer. Well, he said you cannot carry the short trade beyond T+2 day. Now this leaves me with no option but to trade the futures.
 

AW10

Well-Known Member
#6
Raunak, I am an option trader and if you want, I can tell you the way to create synthetic short stock position using Options.

Say you want to short INFY at 2700.. So buy 1 Infy put option 2700, and sell 2700 call at the same time. Call pays for the almost 80 to 90% price of put (if instrument is liquid, then theoratically, Call will pay 100% price of put).

Margin will blocked for short Call. Almost equal to 1 futures contract. Buy as market falls, you margin will be freed.

If market goes up, both call and put will be loosing the value. which is same like your short future going against you.

If you want to keep short open for longer timeframe, then u can very well go for April contracts..

Now major issue is, the option contract for stocks are very limited in liquidity and hence very wide spread. I.e you get peanuts when u sell a option,and pay a bomb when u go to buy them. Hence this strategy is not applicable to majority of stocks in our mkt.
Some leading stocks like RIL, etc have fairly decent liquidity so be careful before using it.
Certainly worth backtesting if you are really interested in it.

I am waiting for the day when our stock options becomes more liquid.

Happy Trading
 

rkkarnani

Well-Known Member
#7
dear mr agarwal this prosess is called stbt sell today buy tomorrow..........this depends upon you broker.............generally you can remain short for one to seven days .....................your broker will block some money depends upon the stock which you are shorting..........i know this because........once i have shorted dlf in intraday and forgot to buy back........i paid them the scrip next day........my broker is india bulls.....when i trade with power india bulls ( their software) and choose......short selling in cash market.......a box appears which has two options a) sell shares in my dp

b)sell shares not in my dp


so this is possible.............you can mail any broker and ask them more ................. like how much money they are going to block
Not all Stocks can be STBT, every broker have a list of stocks in which they allow STBT!!! Then there is some Stock Lending mechanism, not sure how it works, but is officially allowed!!! Best is, as suggested by others ask the broker whose opinion would matter most!!! :)
 

SwingKing

Well-Known Member
#8
I am waiting for the day when our stock options becomes more liquid.
Oh yes ... I don't know how long its going to take. Optionetics course will come in handy only then. :)
 

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