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
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