Basics of Shorting

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In shorting, we need to sell first and then buy later.

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The answer is “Sell“

In shorting, we need to sell first and then buy later.

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When you short a stock and it goes up, you incur a loss. In this case, the loss is 100*(550-500) = 5000 rupees

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The correct answer is “5000 loss“

When you short a stock and it goes up, you incur a loss. In this case, the loss is 100*(550-500) = 5000 rupees

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When shorting in the cash segment, you have to square off the position in the same trading session.

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When shorting in the cash segment, you have to square off the position in the same trading session.

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When a stock gets locked in the upper circuit, there is no way to buy the stock back and square off the position. Therefore, it is very important to check the upper circuit of the stock before shorting it. In fact, we strongly recommend not shorting any stock that has upper & lower circuits.

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When a stock gets locked in the upper circuit, there is no way to buy the stock back and square off the position. Therefore, it is very important to check the upper circuit of the stock before shorting it. In fact, we strongly recommend not shorting any stock that has upper & lower circuits.

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If you are not able to cover a short position in the same trading session, it is called short delivery.

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The correct answer is “short delivery”

If you are not able to cover a short position in the same trading session, it is called short delivery.

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The stock exchange levies very high penalties on short deliveries therefore make sure that you close all the short positions in the cash segment before the end of the trading session. The total cost of short delivery can be as high as 30-40% of your traded value. So, if you shorted 5 Lakh worth of shares and short delivered on that, you could potentially lose as much as 2 Lakh rupees in penalties.

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The answer is “True”

The stock exchange levies very high penalties on short deliveries therefore make sure that you close all the short positions in the cash segment before the end of the trading session. The total cost of short delivery can be as high as 30-40% of your traded value. So, if you shorted 5 Lakh worth of shares and short delivered on that, you could potentially lose as much as 2 Lakh rupees in penalties.

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The answer is “105”

Stop loss in a short position should be higher than your entry price.

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The correct answer is “105”

Stop loss in a short position should be higher than your entry price.

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The answer is “Till the end of month (expiry day)”

When shorting in the Futures, you can carry the position Till the end of month (expiry day)

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The correct answer is “Till the end of month (expiry day)”

When shorting in the Futures, you can carry the position Till the end of month (expiry day)

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The answer is “False”

SEBI had restricted short selling between 2001 to 2008 and even till date, when the market becomes very volatile, SEBI considers banning short selling.

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The correct answer is “False”

SEBI had restricted short selling between 2001 to 2008 and even till date, when the market becomes very volatile, SEBI considers banning short selling.

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The answer is “Not necessarily true”

Typically, yes, we short when we expect a stock or an index to go lower. But there is one scenario in which we short when we expect the prices to go up. That scenario comes in options (when we short a put option). More details in the Futures and Options segment of the program.

It seems you are wrong.

The correct answer is “Not necessarily true”

Typically, yes, we short when we expect a stock or an index to go lower. But there is one scenario in which we short when we expect the prices to go up. That scenario comes in options (when we short a put option). More details in the Futures and Options segment of the program.