Retail investors are often seen getting trapped when there is a short selling in the market. Recently, the domestic market witnessed wild volatility with a negative bias due to a rise in Covid-19 cases, as it raised uncertainty about the global economy.

The spread of Covid-19 has shaken up financial markets in response to tough government actions to combat the pandemic and to support their respective economies. In India, as stocks saw sharp falls in the wake of the Covid-19 outbreak, Se ..

Sebi’s endeavour to curb ‘abnormally high’ volatility amid the coronavirus pandemic has reduced volumes in the market. The Indian regulator was not alone in banning short selling; even regulators in many global markets such as the Europe, China and South Korea took measures to prohibit short selling.

Sebi is unlikely to lift the ban on short selling until and unless the whole situation comes under control. In India, the practice of borrowing shares and selling them is virtually non-existent. Short-selling is done through the futures and options segment.

Mutual funds, foreign players and proprietors are the usual short sellers in the bearish market. Once sentiment improves, investors will participate in a rally rather going for shorts. When everything goes in the right direction, the ..