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Short Selling by Kotak securities


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Short Selling by Kotak securities

  1. 1. Short Selling<br />
  2. 2. What is Short Selling?<br />
  3. 3. Short Selling<br />An adage that describes short selling is "selling high and buying low”<br />Selling Short (Shorting) is an effective tool for traders as it allows them to profit from declining stock and index prices<br />
  4. 4. Short Selling<br />A trader goes short when he anticipates that the price of such stock will fall from the existing price i.e. he borrows shares through Securities Lending & Borrowing Mechanism (SLBM) Segment of Exchange(s) and sells it<br />As the share price dips, he buys the same share at a lower price and returns it back, while pocketing a profit in the bargain<br />
  5. 5. A little bit more on<br />Short Selling<br />
  6. 6. Short Selling<br />Definition of "Selling Short": <br />Selling Short implies establishing a market position by selling a security one does not own, in anticipation that the price of the security will fall<br /> Lets simplify and understand with an example in the next slide<br />
  7. 7. Short Selling<br />Example<br />You anticipate stock ABC will decline and enters order to SELL 2000 shares of ABC at market price and later buy the 2000 shares of ABC at a much-reduced price <br />The difference in the prices of the selling and buying is your profit<br />However if the share prices increase after you have sold at a reduced price earlier, then you end up with a loss<br />
  8. 8. Short Selling<br />Remember: Always, short selling is something that is speculative to a certain extent and is done in anticipation of quick profits.<br />
  9. 9. Thank You!<br /> Questions? Feedback? <br />Click on any of these -<br />Read More<br />Facebook<br />Twitter<br />Website<br />
  10. 10. Registered office: Kotak Securities Limited, 1st Floor, Bakhtawar, 229, Nariman Point, Mumbai - 400021. SEBI Registration No: NSE INB/INF/INE 230808130, BSE INB 010808153/INF 011133230/INE 011207251, OTC INB 200808136, MCXSX INE 260808130.<br />Disclaimer: Investments in securities are subject to market risks, please read the SEBI prescribed Combined RDD prior to investing.<br />* Awarded Best Brokerage Firm in India by AsiaMoney in 2006, 2007, 2008 and 2009<br />