What is short sell & short cover in trading in Indian Capital Market?
Short sale means selling something you don’t own. If you don’t have shares and you give sell order in stock market, it is called short selling. And short covering is buying back the short-sold shares. Suppose you tell your broker to sell 100 shares of TCS at Rs 500. You don’t have it in your demat account. In this case, you have short-sold these shares. At the end of the day, you buy these shares back at Rs 480. So, you have covered your short sale position.
