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SHORT SELLING IN NSE
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?
VituVingiSana
#2 Posted : Sunday, February 28, 2010 10:43:16 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,349
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
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.
VituVingiSana
#4 Posted : Monday, March 01, 2010 8:40:12 AM
Rank: Chief

Joined: 1/3/2007
Posts: 18,349
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
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
VituVingiSana
#6 Posted : Tuesday, March 02, 2010 8:47:18 AM
Rank: Chief

Joined: 1/3/2007
Posts: 18,349
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
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
VituVingiSana
#8 Posted : Tuesday, March 02, 2010 11:41:04 AM
Rank: Chief

Joined: 1/3/2007
Posts: 18,349
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
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?
VituVingiSana
#10 Posted : Tuesday, March 02, 2010 11:57:08 AM
Rank: Chief

Joined: 1/3/2007
Posts: 18,349
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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