Your Money: Short selling: Stock trading weapon for bears
The margin trading contract usually includes a stock loan approval clause. By Sunil K Parameswaran As we know, bulls are traders who expect the markets to rise. As a result, they purchase securities in anticipation of a situation where they can later sell at a higher price. Technically, we say that such traders have been long in stocks. Long traders can sell the stocks whenever they want. Their philosophy is "buy cheap and sell high". Bearish speculators, on the other hand, expect the markets to decline later. They want to take advantage of it by borrowing securities and then selling them. They assume that they can then get the securities back at a lower price and return them. Technically, we say that such traders were short in securities. Traders who take short positions have an obligation to buy back and redeem the securities. This act of buying back and returning the assets is known as "covering a short position". Hence, the philosophy of such traders i...