#Economy
Short selling - Naked short selling ban
Short selling is an investment strategy where an investor borrows shares and sells them on the market, hoping to buy them back later at a lower price. For example, if an investor anticipates that Adani's stock will drop from ₹1800 to ₹1700, they borrow and sell it at the current high price (₹1800). Later, if the price drops as expected to ₹1700, they buy the same number of shares back at this lower price, return the shares to the lender, and keep the difference (₹100 per share) as profit.
In the Adani case, Hindenburg Research released a report alleging financial misconduct by the Adani Group. This led to a drop in Adani's share price, and there were claims that Hindenburg profited from this price fall through short selling.
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