Can we short sell equities and hold the position overnight.? If not in which segments we can hold the short position overnight.?

General
1

If not in which segments can we hold a short position…?

2

No you can’t short sell equities and hold overnight.

You will have to use derivatives, i.e futures and options.

You can learn about futures and options here: http://zerodha.com/varsity/

1 Like
3

but here in varsity, it is suggested to short the stock at evening at 3:20 pm in the evening (to take advantage of an evening star pattern) so as to make profit on the following days.

  1. Short the stock on P3, around the close of 3:20 PM after validating that P1 to P3 form an evening star
4

Shorting using futures and options. You can read the F&O module here.

1 Like
5

You can short stocks only under F&O segments…
If your view is bearish for a stock, you can either short the futures or sell CE (call option).

Note: holding overnight F&O positions is quite risky and can wipe out your account if its without hedge.

Instead of shorting futures, you can do the following scenario also:

If suppose ITC is at 230 and your view is it will go down and not cross 230… you can short ITC 230 CE and at the same time buy 240 CE as a hedge which will reduce margin requirement as well as act as a protection in case your view goes wrong… even if ITC stock doesn’t go down but is sideways for few trading sessions, theta decay will be in your advantage and you can gain few points.

Again, disclaimer: do you own research before taking any trades :+1: