Investing Short selling Positions Kite

Sold stocks shown as negative positions on Kite

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A negative quantity on the Kite Positions tab means you have a short position: you sold the instrument without holding it first (or sold more than you held), and are obligated to buy it back to close the position. The negative sign is the standard notation across all Indian broker platforms.

When you can have a negative position

SegmentNegative position allowed?When closed
Equity intraday (MIS)Yes, within the trading dayMust be squared off by ~15:20; auto-square-off triggers
Equity CNCNo (cannot short for delivery)n/a
F&O futuresYes, including overnight (NRML)Manual close or expiry
F&O optionsYes (option selling, both legs)Manual close or expiry
Currency derivativesYes (NRML)Manual close or expiry
Commodity (MCX)Yes (NRML)Manual close or expiry

Examples

Intraday equity short

You short 100 RELIANCE at Rs 2,900 (MIS). The Positions tab shows:

  • Qty: -100
  • Avg price: 2,900
  • LTP: 2,895
  • P&L: +500 (profit when LTP falls below entry)

You must buy back 100 RELIANCE before market close. Failure to do so triggers Zerodha’s auto-square-off near 15:20 IST.

F&O futures short

You sell 1 lot of NIFTY 23MAY FUT at 22,000 (NRML). The Positions tab shows:

  • Qty: -50 (assuming lot size 50)
  • Avg price: 22,000
  • LTP: 21,950
  • P&L: +2,500 (50 x 50 points profit)

The position can be held overnight. To close, buy back 1 lot of NIFTY 23MAY FUT.

Option seller

You sell 1 lot of NIFTY 23MAY 22000 CE at premium Rs 50. The Positions tab shows:

  • Qty: -50 (negative because you sold to open)
  • Avg price: 50
  • LTP: 30
  • P&L: +1,000 (50 x 20 points premium decline)

Option sellers profit when option premium falls. The Qty is negative because the seller has written (sold to open) the contract.

How P&L is computed for shorts

For a short position:

P&L = (Avg price - LTP) x abs(Qty)

The order of subtraction reverses compared to long positions. Sometimes Kite displays this as:

P&L = -1 x (LTP - Avg price) x abs(Qty)

Both produce the same number with the correct sign. If LTP < Avg price (price has fallen since you sold), P&L is positive.

For more on this: Positions tab showing profit when buy avg greater than LTP .

Why this is not “sold” in the Holdings sense

If you sell shares you actually hold (CNC sell), the position moves through the Positions tab briefly (during the same day) and then closes. The Holdings tab Qty decreases. No negative quantity appears.

A short sale is different: you sold something you did not have. To close, you must buy. Until then, the position is open (short).

Risks of short positions

  • Unlimited upside risk for naked equity shorts (intraday): a stock can rise indefinitely.
  • Margin requirement scales with notional value; SPAN + exposure margin applies.
  • Auto-square-off at end of day; slippage on forced exit is the user’s risk.
  • F&O option sellers face theoretically unlimited risk on short calls and substantial risk on short puts.
  • Margin call during the day if MTM moves adversely past margin available.

Closing a short position

To close:

  1. Identify the contract on the Positions tab.
  2. Use the Exit / Square-off button on the row.
  3. The system places a buy order for the negative quantity (i.e., for abs(Qty) shares).
  4. On execution, the Qty becomes zero; realised P&L locks in.

For bulk exit: How to quick exit holdings / positions .

See also

External references

References

  1. SEBI, Short selling and SLB framework, sebi.gov.in.
  2. Zerodha Support, Short positions on Kite, support.zerodha.com.
  3. NSE India, Equity intraday and F&O short positions, nseindia.com.

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