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How do I short sell shares in equity and futures?

A short sale (or short sell) is a trade taken when you feel that the price of the security is likely to decline from its current price. In a short sale, you sell the security first and buy back later on.

Equity

To short in Equity (EQ), you have to place the order using either MIS or CO, i.e. intraday order because you cannot hold the positions overnight when you short sell in the equity segment using CNC. See What does CNC, MIS and NRML mean?

If you have not exited (bought back) the short position before 3:20 PM, your position will be squared off by our RMS and auto square-off charges will be applied. See What are call and trade (auto square off) charges? .

Short selling is allowed only in a list of scripts ( DOC ) that is prepared by Zerodha’s Risk Management Team’s (RMS) discretion based on liquidity, volatility and other factors.

If you short sell in equity and do not buy back the stock on the same day due to various reasons like stock hitting upper circuit or no liquidity or other reasons, it may result in short delivery. See Consequences of short delivery

Equity Futures

You can short sell a futures contract and carry it overnight, unlike short selling in the equity segment, where you have to square off the short position on the same day. You can use MIS (for intraday) or NRML (for overnight) product types to place this order. If you trade futures using MIS, you have to convert it to NRML to carry it overnight or square off the position before 3:25 PM to avoid auto square off charges. Visit zerodha.com/varsity/module/futures-trading/ to know more about futures.

Visit zerodha.com/varsity/chapter/shorting/ to know more about shorting.