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Trading Basics

Short Selling

Definition

Selling borrowed securities hoping to buy them back at a lower price.

Understanding Short Selling

Short Selling is an important concept in stock market trading. Understanding this term will help you make better trading decisions and communicate effectively with other traders and financial professionals.

Key Points

  • Basic Definition: Selling borrowed securities hoping to buy them back at a lower price.
  • Category: This term is commonly used in Trading Basics
  • Relevance: Essential knowledge for traders operating in Indian stock markets

Practical Example

When trading on NSE or BSE, you'll encounter short selling regularly. For example, understanding this concept helps you analyze market conditions, make informed decisions, and manage your trading positions effectively.

Related Concepts

To fully understand short selling, you should also be familiar with related trading concepts. Check out the related terms in the sidebar for a comprehensive understanding of this topic.

Related Terms

  • Ask PriceThe lowest price a seller is willing to accept for a security. Also known as the offer price.
  • Bid PriceThe highest price a buyer is willing to pay for a security.
  • Bid-Ask SpreadThe difference between the bid price and ask price. A measure of market liquidity.
  • Market OrderAn order to buy or sell a security immediately at the best available price.
  • Limit OrderAn order to buy or sell a security at a specific price or better.
  • Stop LossAn order to sell a security when it reaches a certain price, used to limit losses.

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