Understanding Short Selling in Intraday Trading at FYERS - A Comprehensive Guide

What is short selling?

Short selling is a trading strategy where you borrow and sell a security you don't own, hoping to repurchase it later at a lower price, profiting from the price difference.

For instance, if you borrow 100 shares of a company at ₹550 each, you'd receive ₹55,000. If the price of the share drops to ₹540, you can buy them back for ₹54,000. The difference of ₹1,000 will be your profit.

Points to remember:
  1. At FYERS, short selling is permitted only in intraday trading, and positions must be squared off the same day.
  2. Short selling isn't allowed in equity delivery; you can't sell shares you don't own in your Demat account for delivery later.
  3. Any short sell position not squared off during market hours will be due for auction settlement on T+1 day, potentially incurring penalties.
For short selling beyond a day, consider these alternatives using derivatives:
  1. Sell the future of the asset or stock.
  2. Sell the call option of the asset or stock.
  3. Buy the put option of the asset or stock.

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