Please Explain this situation!

Consider a situation for a SPINNING TOP UPTREND.

What is booking profits?

Assume you own 500
shares; you can use this opportunity to book profits on 50% of your holding i.e 250 shares. Two
things can happen after you do this:

  1. The bears make an entry – When this happens the market starts to slide down, and as you
    have booked 50% profits at a higher price, and can now choose to book profits on the balance 50% as well. Your net selling price will anyway be higher than the current market price.
  2. The bulls make an entry – It turns out that the bulls were indeed taking a pause and the
    rally continues, at least you are not completely out of the market as you still have the balance 50% of your holdings invested in the markets.

Can Anyone explain to me what exactly happening here. I’m not getting any of it. Thanks

Suppose you have 10 shares of A @Rs.10.

You have sold 5 shares @ Rs.20. Bear makes an entry and prices decline to Rs.15.
You sold remaining 5 shares @Rs.15.
Your average selling price will be Rs.17.5.

If the prices comes to Rs.18 and then again starts rising and crosses Rs.20 you will still have 5 shares with you to ride the rally.


Thanks Harshedra for repling to my question. I have a little doubt wondering if you can clear it.

It’s only after the first selling of 5 share @20?

The given statement assumes that you have sold shares when its prices reached Rs.20 and a correction occured bringing the prices to Rs.18.

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Thank you very much Harshendra. :slight_smile:

I know I’m asking too much from you. And if you preferred not to answer this It is completely fine.
Can you tell my what holding a position, open positions means?

If I buy 10 shares of Infosys today - then my open position for today is +10 Infosys. On T+1, you will notice 10 Infy in your Holding Position.

So essentially ‘Open Position’ reflects your trade activity for today…and holdings reflect your position in DEMAT.

And what if I buy with intraday? Where I get square off on 3:20? In this case if I don’t convert my MIS to CNC what happen then?

Sorry, my bad, I’m editing the response -

Two position (buy and sell of the same stock, same quantity) nets off your open position.

I’m completely new to share markets Karthik. Please tell my why do I have 2 positions?

When you sell intraday there will not be any open positions left.

But Karthik said that I will have 2 positions?

It will show in the list of trades done two rows.
One for buy and other for sell.