Introduction to Short-Selling in India

In the Indian stock market, short-selling is allowed but comes with specific regulations. This article provides an in-depth look at the regulations governing short-selling, the risks involved, and the brokers that offer this service.

Regulations for Short-Selling in India

Short-selling in India is regulated by the Securities and Exchange Board of India (SEBI). Investors engaging in short-selling must comply with the guidelines set by SEBI regarding the borrowing and lending of shares. Short-selling involves borrowing shares to sell them with the expectation that they can be bought back at a lower price, thus profiting from the difference.

Overnight Short-Selling

Short-selling is permissible in India, but holding short positions overnight can be risky. This is due to potential market fluctuations which can expose investors to significant losses. It is important to understand the risks involved and manage them accordingly.

Bridging the Gap: Brokers Offering Short-Selling

Several brokers in India provide the facility for short-selling, including:

However, it is advisable to check the specific terms, conditions, and any applicable fees related to short-selling with individual brokers. Understanding these aspects is crucial before proceeding with short-selling.

Additional Considerations

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In the cash market, overnight short-selling is not allowed. However, stocks can be short-sold intraday, with same-day square-off. For holding periods, short selling in futures or holding period of up to 3 months as per the futures contract expiry is permissible.