Short Selling

General
1

Hello sir,

I am just trying to understand Short Selling in NSE options trading

Is Short selling legal in Indian markets in NSE/BSE?


Example:Please tell me in which points I can make profits

1. I purchased ABC stock 150/- Call option @ 15/- . But stock has taken reverse trend.

2. Then I bought 150/- put option @ 14/-. If I sell Put option @ 16/- I can get profit 2/- 

3. Can I go for short selling on the same stock option?

4. Can I short sell same 150/-put option? (Assuming Put will go down and 1. pont call option will up move). In this case can I get two profits point 1 and 4?

Thanks & Regards,

Venu

2

Short selling of options is also called Option writing and is absolutely legal. Check this blog post on option writing.  We will soon have a module on F&O on Varsity

1. You have bought call on a stock and the price of stock goes down. The value of calls will go down, so you will make a loss. 

2. Yes. 

3. Yes.

4. Yes