How to do Short Selling:- Short selling can be done in two ways
Intraday short selling - Equity and Positional Short Selling - Future and Option

Short Selling In Intraday:
Short selling is usually done in intraday trading in relation to any particular stock, that is, you sold the stock today and bought it again before the market closes
The important point in Short selling:
If you do not complete the deal after selling short stock for some reason and forget to buy it again, then in such case, the stock you have sold will not get delivered to the buyer. In this transaction, the Stock Exchange will consider you a short selling defaulter and they will make you pay a huge amount of money in the form of penalty.
So when you sell short, keep in mind that you need to complete the deal within the fixed time.

Short Selling In Future And Option (Derivative): Short selling is very popular in Future and option (derivate) trading, as you can carry our short selling position till the expiry date.

Purpose of Short Selling:

The purpose of short selling in hedging, which we also call as security or investment.
There is a lot of fluctuation in the stock market; To avoid these fluctuations, we have to make our portfolio secure, which is called hedging. And hedging is used to protect the portfolio from short-term fluctuations, and short selling works very well for hedging.

When to Do Short Selling

  • It should be done when a big event is going to be held, and it seems that share will fall because of bad budget.
  • Whenever there is a fall in the international market and it is going to affect the Indian market.
  • When a company's financial report is expected to get worse
  • When people are not enthusiastic about the stock market in hopes of a political change, and the markets are expected to fall
  • When the Reserve Bank brings some new policy or changes a policy.
  • When there is a change in the management of a company, the stock price of the company is expected to fall
Author's Bio: 

I'm Mansi Dandekar, I am sharing an article about How and When to do Short Selling?. Here is more information on the Free Trading Tips and Free Commodity Trading Tips.