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.
