Shortselling of stock means selling a stock that you have not in your demat account and you borrow it from others and then sell it in the market. You can make profit by short selling a stock but it involves high risk. First lets understand why you should short sell and how?
Suppose you guess that the stock of Axis Bank, now trading @Rs.500/-, will go down in a few hours in the market hour. Then you choose to short sell this stock of axis bank and if the stock goes down to your expectation you will earn profit and if it goes up then you will incur lose. Remember short selling of stock involves high risk because a stock may go up beyond any limit. Therefore, when you choose to short sell a stock never forget to put a strict stop-loss and also clear your position before the market closes.
No comments:
Post a Comment