Sebi has allowed short selling by all categories of investors, including retail and institutional, but has also imposed certain conditions to prevent market manipulation. Let's understand more about it.
WHAT IS SHORT SELLING?
■ It is also known as 'shotting'. Under this strategy, traders first sell the shares to buyers at a higher price and then buy them back at a lower price at a later date or time.
■ The price difference between these is the trader's profit or loss.
■ Sebi defines short selling as a process in which traders sell shares even when they do not own them.
■ These shares are usually sold in the market on margin (borrowed) money and bought when the price falls.
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