Like Hindenburg, you too can earn big money by short selling, know how to short sell, what is it

What is short selling

Short selling is a trading or investment strategy. In this, a person buys stock or securities at a particular price and then sells it when the price is high, which makes a profit. Simply put, short selling is a trading strategy. In this, money is earned when the price of a share falls. If an investor knows that the shares of a company may decline in the coming time, then he can buy and sell the shares of that company when it declines. This is called short selling. Hindenburg also earns in the same way. Hindenburg has taken a short position in the bonds of Adani Company in the US and he himself has informed about the same. Think of short selling as if a short seller expects a stock of Rs 500 to fall to Rs 300 level, he can borrow the stock from a broker using a margin account and buy back the same stock before the settlement period. Could The short seller will sell the stock at Rs 500 with the hope of buying it back if it falls to Rs 300. If the stock actually declines, the stock seller buys back the shares and closes his position. If the share was sold at Rs.100 and bought back at Rs.85, there was a profit of Rs.15 per share.

How to do short selling?

Short selling in the market can happen in three ways. First – Cash, Second – Options, Third – Futures. It is to be noted here that only intraday short selling can be done in cash, whereas shots taken in options and futures can be carried forward. Let us tell you, the regulator keeps a close watch on short selling and takes immediate action if any irregularities are found. In simple language, short selling is that in which the trader sells the stock even when he does not have it. These are sold in the market on margin and bought later when the price falls.

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Hindenburg had also shorted the shares of these companies.

The report came out after Hindenburg took a short position in Adani shares. Adani Group’s shares fell sharply after the report and it was here that Hindenburg made a sizeable profit. Hindenburg has issued such reports against many big companies even before Adani Group. Hindenburg has filed reports against companies such as Nikola, SCWORX, Genius Brand, Ideanomic, Vince Finance, Genius Brands, SC Wrox, HF Food, Bloom Energy, Aphria, Twitter Inc. When the stock prices fell because of this report, Hindenburg made a profit.