There is too much negative news in the market like US-China trade war, multi-year low GDP data, delayed monsoon in south etc. Obviously, Its impact will be seen on nifty which could lead to a big correction or small correction; no one knows. One thing is for sure that People gonna loss money in coming days if they will not change their side. By side, I mean to say; you can shift from buy to sell side.
Most of the Indian retail investors know only about the buying side of the trade and that’s the main reason for their loss and loss of their hope to earn money from the share market.
Today, we are going to learn about how to make money if the Stock Market is in the declining phase. Yes, You read it right; money can be made even when Stock prices are declining. For that, You have to reverse the way you were doing trading. Start selling the stock instead of buying. Selling of stock is known as short selling.
Short selling is the best way to make money when the Stock Market is falling.
In the Indian Stock Market, Share Brokers allows you to short the stock without owning it. This facility is applicable for only Intraday trading. If you want to short the stock for a month or a week; you have to go in future and options which involve a lot of cash.
How to make money through short selling;
There are 2 ways to earn money when the stock market is falling;
- Short Futures of stock to make money when the Stock Market is falling:
There are 100 of stocks who are available for trading through futures. I will explain you with an example. There was news of NCC share price that Andhra Pradesh Govt. cancelled their projects; this news leads NCC share to 12% of fall. As I was aware of this news in mind; I also considered shorting of this stock future which gave me a good reward as you can see below.
I could go wrong, But you can check rewards which were worth of risk.
2. Buy Put option to make money when the Stock Market is falling :
You could also buy Put Option to make money during the stock market crash. As there was news in the market that Us-China trade is not going to happen and globally market was waiting for that news so the crash was for sure. I also bought a Put option on the hope of that news which proves out correctly and It helps me to make money of rs. 8000 only in 8 seconds.
You should not hold even trade for a long time, Book profit whenever you find it comfortable.
Above examples are looking easy, but it involves a lot of risk and patience. If you are expecting market direction in down direction; you could buy Put Option of Nifty. Because stock can perform in the reverse direction but Nifty can’t until or unless there is any news.
At the end, we would like to say always trade with proper stop loss and risk management. Don’t forget that How to make money when Stock Market is falling; Stay away from the penny trades.
Best of Luck