RE:Difference between Short selling & short cover
by achal dugar on Dec 22, 2007 04:09 PM Permalink
Short selling is done when u sell the stocks.... For e.g u purchased 100 IFCI at Rs 100/ which means Rs 10000 shares u have short sell. U feel that price of IFCI will GO down. Suppose IFCI's Share price decresed to 80 ... U then cover the IFCI SHare which is called short cover i.e 80 * 100 which makes Rs 8000 - . Hence tthe difference 10000-8000 = Rs 2000- is your profit . But suppose if IFCI goes upto Rs 110/- then 10000 - 11000 = -1000 is ur loss. Therefore the concluson is U sell the stocks which u dont owe called short selling.. but then in the same day u have to buy back the shares called short cover.
RE:Difference between Short selling & short cover
by abboral boral on Dec 22, 2007 09:17 PM Permalink
I am a retail investor .can I do as per your advise about short selling on line .Pl advise
the provisions will not affect retail invetsors in a big way except for the fact that they too will be allowed to treat cash like futures and go short on the same, however short selling is restricted to stocks in F n O category...individual traders can continue to day trade in the cash market as per the current norms.However in the event of a market fall...the fall would definitely get exacerbated intially but the rise can also be equally stunning due to huge short covering...all in all the provisions allow for deepening the financial market in india
