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Answer Posted / sai prasad
short selling is nothing but selling a stock without
actually possessing it. ex:- u know a stock of a cement
company which is trading at Rs.100 and u know that
infrastructure projects are not doing well and the worst
will be expected in next month.. so consequently cement
demand will come down.. now u will sell that cement company
stock at current price i.e, 100 without actually having the
documents in ur hand and u will say the buying party that u
will give the document in 45 days,, so in the next 45 days ,
as u expected, if price comes down by Rs.70 of the cement
company share,u will buy the share at Rs.70 and give that
orginal documents.. therefore ur thread is Rs.30...u gain
out there and viceversa..
| Is This Answer Correct ? | 12 Yes | 3 No |
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