However in this chapter we are going to look at shorting in larger element. Shorting is a difficult idea as a result of we’re not used to shorting in our each day transaction. For instance think about this transaction – You buy an condo immediately for let us say Rs.X, sell it 2 years later for Rs.X+Y. The profit made on the transaction is the incremental value over and above Rs.X, which happens to be Rs.Y. This is an easy and a highly intuitive transaction. In reality many of the daily transactions requires us to purchase something first and sell it later (possibly for a revenue or a loss). These are easy to know transactions and we’re used to it. However in a short sale or a just ‘shorting’ we feature out the transactions in the actual opposite direction i.e. to promote first and purchase later.
iM additional refines the …