Short position

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sidambaraselvan (Querist)

07 September 2013 My friend told that take Short Position when the market is in the downtrend position.

i.e., I should first sell the shares and then I should buy the same share.

How it is possible to sell the share without having any share in hands?

whose share will be sold as I don't buy it? and for whom I should Buy the shares?

If I sell the share then how can I buy it.

If my question is confusing, kindly guide me on the "SHORT POSITION" in Share trading.

CA Kintal Shah

CA Kintal Shah (Expert)

15 September 2013 Short sell is First Selling and then Buying. Here idea is to make profit when prices are falling. e.g. Sell at 100 and when price falls to 90-95 buy it. So you make profit.

But here few points need to think:
1. If you sell shares which you dont have in your demat, then you need to Buy them (Square off) before 3.30 on the same day. Otherwise delivery gets due and if you cant give delivery on T+2 then it will get auctioned.

2. Usually if the trade is done in F&O then, you can carry your position overnight. i.e. sell today and square off anytime before month end OR even after that by rolling over to next series. It seems you are new in stock market and hence i would never suggest this to you. Better stay 100km away from F&O.

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