As we know for every buyer there’s a seller in taking the long position/buying; in day trading it is too important to have massive volume to buy and sell seamlessly as their are literally more buyers and sellers. But i wanna ask that, in the case of short position, it is said that the shares which are shorted are borrowed from the broker/exchange and when buyed back, the shares borrowed are returned to the broker/exchange. SO, shall i assume that their isn’t any need of volume in short position, as the shares are borrowed from the broker?
I asked similar question 2 years ago http://tradingqna.com/5643/in-short-selling-is-the-share-borrowed
There is no borrowing of shares taking place in day trading. Long and short positions are taken by traders and for the positions not closed by day end, process of share transfer starts from seller to buyer and completes by T+2 day. For positions closed before day end, the difference in price is applied to their account without any transfer of shares. That is reason, margin money is required for day trading, so that if they make a loss, the amount can be deducted from the margin.