The speaker, CA Rachana Ranade, explains the concept of short selling in the stock market. She defines short selling as selling a stock that you don't own, with the expectation of buying it back at a lower price to make a profit. The sequence of transactions in short selling is the opposite of a regular transaction, where you first sell and then buy.
To do short selling, you need to place a Margin Intraday Settlement (MIS) order, which means you have to square off the position within the same day. If you don't, your broker will automatically square off the transaction at the end of the day.
Rachana explains that short selling is allowed in India, but it has to be done within the same day. She also explains that when you sell a stock, you don't actually own it, but your broker allows you to sell it. When you buy it back, the net effect is zero, and you don't receive the delivery of the shares.
She also discusses what happens if the stock hits an upper circuit, where the stock price goes up, and there are no sellers. In this case, the share gets auctioned, and the broker buys the shares on your behalf after the market closes.
Finally, Rachana mentions that she has covered this topic in more detail in her basics of stock market lecture series and invites viewers to check out her website and social media channels for more information and resources.
Here are the key facts from the text:
1. The speaker, CA Rachana Ranade, is discussing the concept of short selling in the stock market.
2. Short selling involves selling a stock first and then buying it back later at a lower price.
3. The sequence of transactions in short selling is opposite to that of a normal transaction, where one buys first and then sells.
4. To short sell, one needs to place an MIS (Margin Intraday Settlement) order.
5. MIS orders are squared off by brokers at their own time slots, usually before the market closes.
6. If a short sell order is not squared off by the end of the day, the broker will automatically square it off.
7. In India, short selling is allowed by the regulatory body, SEBI (Securities and Exchange Board of India).
8. SEBI allows short selling as long as it is done as an intraday settlement.
9. If a country bans short selling, it will not be allowed in that country.
10. In 2011, some countries like France, Spain, Italy, and Belgium banned short selling.
11. China banned short selling in some specific commodities and indices during the Corona time.
12. In India, the stock market is open from 9:15 am to 3:30 pm.
13. Some brokers, like Zerodha, give an additional 10 minutes to square off short sell orders.
14. If a short sell order is not squared off by the end of the day, the broker will buy the shares on behalf of the client after the market closes.
15. The shares will be bought at the prevailing market price, which may be higher than the original selling price.
16. The client will incur a loss if the buying price is higher than the original selling price.
17. The loss will be the difference between the buying price and the original selling price.
18. The speaker has a website (www.rachanaranade.com) where she posts blogs and other content related to the stock market.
19. The speaker has a telegram channel where she shares updates and other information related to the stock market.