What is Short Selling 2024?

What is Short Selling 2024 ? | Hi Friends,We have learned about stock market, how to invest in them and how to earn profits in earlier.

Today we will learn about short selling which is important in stock market in this video. Generally, when a share price is rising, if you buy that share at a low price and sell it at a high price, we will get profits.

Definition Of Short Selling ?| What Is Short Selling 2024?

What Is Short Selling 2024? – This is known to everyone but even when a share price is falling, we can earn money from that share, this method is called short selling. It is used in date trading now let’s know about it in more detail.

We normally buy a share before you and sell it later but in short selling we sell the shares first and buy them later. It is a bit confusing but it is very easy to understand. Let’s see how it works with an example.

Know Through An Example | What is Short Selling 2024?

For example, let’s say the share price of Reliance is 1000 rupees. You feel that the share price of Reliance may fall today due to some bad news.

What is Short Selling 2024? – At such time you sell one share near this thousand rupees. Here you may get a doubt listen carefully how we can sell without having shares.

What happens here is that our brokerage firms lend us shares. So now you borrow one Reliance share and sell it to someone else for 1000 rupees. Again today at 3:15 PM i.e. before the trading section closes, the names should be bought at some price and given to the brokers again.

Know Through An Example | What is Short Selling 2024?

What is Short Selling 2024 – For example, when Reliance share price was around 1000 rupees, we borrowed from brokers. Later the share price fell to 900 due to bad news.

At this price you buy your share again and return it to your brokers. You may have another doubt here. We borrowed from the brokers for 1000 rupees but the return is around 900. Whether the brokers will accept it or not has nothing to do with the share price. How many shares we have borrowed should be returned before the trading closes. So we will sell you a share for 1000 rupees.

Now this share price has gradually fallen to 900. Let’s say we bought a share at this price, so if we get a profit of 100 rupees, then after selling the share for 1000 rupees, let’s say the share price has increased from 1000 rupees to 1100 rupees. Now you have to buy at a higher price than the selling price.

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What is Short Selling 2024? | Before the closing of this trading session, you should buy the share at a certain price and give it to the brokers. So there is another way or we will buy shares at a price higher than the selling price i.e. around 1100 and return to the brokers.

As we sold near 1000 rupees and bought near 1100 rupees, we got a loss of 100 rupees, so in this part selling, if the share price falls more than the fries you sold, we get a profit and if the share price increases, we get a loss, but the thing to remember here is that this short selling is also a risk. In addition, many traders analyze which company’s share price may fall today and do short selling on them.

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