Question
When traders first sell securities without first
borrowing them or having possession of those securities, that is called:Solution
Short Selling is the sale of securities that the seller has borrowed rather than owning. The transaction is accompanied by pledge to acquire the stocks at a later date. As per SEBI norms, short selling shall be defined as selling a stock which the seller does not own at the time of trade. All classes of investors, viz., retail and institutional investors, shall be permitted to short sell. When traders do not have possession or do not borrow those securities while doing a trade its called naked short selling. Naked Short selling is not permitted in India
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