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SHORT SELLING IN NSE

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mwanafunzi		#1 Posted : Sunday, February 28, 2010 8:07:21 PM
Rank: Member Joined: 12/3/2008 Posts: 113		Trading in the nse does not favor traders who only profit on a one directional price movement.short selling should be introduced alongside more financial instruments.whats your take?
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VituVingiSana		#2 Posted : Sunday, February 28, 2010 10:43:16 PM
Rank: Chief Joined: 1/3/2007 Posts: 18,118 Location: Nairobi		mwanafunzi wrote: Trading in the nse does not favor traders who only profit on a one directional price movement.short selling should be introduced alongside more financial instruments.whats your take? Yes but this is Kenya... land of molasses-like institutions... Greedy when others are fearful. Very fearful when others are greedy - *to paraphrase Warren Buffett*
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sheep		#3 Posted : Monday, March 01, 2010 6:24:59 AM
Rank: Veteran Joined: 7/24/2008 Posts: 781		Lets first wait for the demutualization of the bourse,if it ever happens.FYI brokers in kenya are simply gambling cartels masked as professional outfits.Its their belief that the duty of an investor is to continually put money in stocks and leave the other "complicated" stuff to them no wonder most of them collapse. They simply cant compete with the smart foreigners,who always leave them holding monkeys.If you have been observant foreigners once again raided the NSE at 2200 and have supported it since,and when the locals start the buying frenzy sending the index to new heights they will look for an opportune time to once again leave us holding them monkeys,damn! The utimate goal of investing is to buy low sell high;if we re-write this core equation in psychology terms it becomes buy fear sell greed.
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VituVingiSana		#4 Posted : Monday, March 01, 2010 8:40:12 AM
Rank: Chief Joined: 1/3/2007 Posts: 18,118 Location: Nairobi		@sheep - Well, then it is Kenyans who are idiots... Look in this day & age... on the NSE, you have a choice i.e. no-one forces you to buy high or sell low... Greedy when others are fearful. Very fearful when others are greedy - *to paraphrase Warren Buffett*
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guru267		#5 Posted : Tuesday, March 02, 2010 5:33:45 AM
Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi		@mwanafunzi.. after the demutualization and the listing of a few more companies the NSE plans to introduce derivatives and stock futures trading to the market(cant wait)... Lets be patient.. the market is still too young and too illiquid for what you are talking about... i think in africa only the JSE trades in stock futures and derivatives Mark 12:29 Deuteronomy 4:16
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VituVingiSana		#6 Posted : Tuesday, March 02, 2010 8:47:18 AM
Rank: Chief Joined: 1/3/2007 Posts: 18,118 Location: Nairobi		@guru - I think safaricom might be a good candidate for options. Others are Mumias, EABL & KQ coz these shares are liquid with a good spread of investors... Greedy when others are fearful. Very fearful when others are greedy - *to paraphrase Warren Buffett*
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kizee		#7 Posted : Tuesday, March 02, 2010 11:28:11 AM
Rank: Member Joined: 1/9/2008 Posts: 537		fortunately u can price options even in illiquid stocks, guess u cud theoretically price any counter i think u wud hav to tweak the black scholes model to recognize ur inability to short sell
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VituVingiSana		#8 Posted : Tuesday, March 02, 2010 11:41:04 AM
Rank: Chief Joined: 1/3/2007 Posts: 18,118 Location: Nairobi		@kizee - Options on an illiquid stock is suicide... Even on liquid stocks, you can get into trouble... Short Squeeze... Greedy when others are fearful. Very fearful when others are greedy - *to paraphrase Warren Buffett*
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kizee		#9 Posted : Tuesday, March 02, 2010 11:45:46 AM
Rank: Member Joined: 1/9/2008 Posts: 537		hehehe short squeeze on an option?how?
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VituVingiSana		#10 Posted : Tuesday, March 02, 2010 11:57:08 AM
Rank: Chief Joined: 1/3/2007 Posts: 18,118 Location: Nairobi		Not a short squeeze on options... I have never seen that... Options on shares that can easily be short-squeezed or long-squeezed are way too risky for me... Greedy when others are fearful. Very fearful when others are greedy - *to paraphrase Warren Buffett*
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kizee		#11 Posted : Tuesday, March 02, 2010 11:59:56 AM
Rank: Member Joined: 1/9/2008 Posts: 537		so a long squeeze wud occur wen ur holding an overly liquid counter?
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VituVingiSana		#12 Posted : Tuesday, March 02, 2010 12:33:24 PM
Rank: Chief Joined: 1/3/2007 Posts: 18,118 Location: Nairobi		kizee wrote: so a long squeeze wud occur wen ur holding an overly liquid counter? A long squeeze can happen to almost any counter... but generally more pronounced in an illiquid counter... A liquid counter is simply liquid under 'normal' trading... Otherwise it means nothing... Say mugabe calls kibaki & convinces him to 'nationalise' safaricom [so kibaki & clique can screw us over again (mobitelea style)] What does that mean? Well, (almost) no-one will want your safaricom shares... so no more liquidity... Greedy when others are fearful. Very fearful when others are greedy - *to paraphrase Warren Buffett*
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kizee		#13 Posted : Tuesday, March 02, 2010 12:50:21 PM
Rank: Member Joined: 1/9/2008 Posts: 537		so whether u bot the stock or a call on the stock u loose? at least with the call ur loss is limited
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Scubidu		#14 Posted : Wednesday, March 24, 2010 3:40:01 PM
Rank: Veteran Joined: 9/4/2009 Posts: 700 Location: Nairobi		American's canning down on short selling. The downside to stricter regulation (I wonder if they have some new law for targeting naked short selling). Read more: http://www.zerohedge.com...thing-be-illegal-shortly “We are the middle children of history man, no purpose or place. We have no great war, no great depression. Our great war is a spiritual war, our great depression is our lives!" – Tyler Durden
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