Short Selling in Trading By Laurent Bernut – QuantInsti By QuantInsti

Free Download Short Selling in Trading By Laurent Bernut – QuantInsti By QuantInsti

Short Selling in Trading

Can you make money if the markets are failing? In the event of a market decline or correction, know when to sell your stocks and when to leave the position. Learn how to develop different trading strategies using the short selling strategy from traders who have decades of market expertise.

LIVE TRADING

• Create a long-short portfolio strategy and backtest it.
• Determine an asset’s predicted returns.
• Create a screener to keep an eye on various stocks.
• Describe the relative series and compare several stocks using it.
• Describe many models, including floor and ceiling, momentum, breakout, and swings.
• Use a variety of indicators, such as the Girt ratio and the gain to pain ratio, to assess the success of your portfolio.
• Trade your strategy live and on paper without the need for downloads or installations.

SKILLS COVERED

Long/Short Portfolio Strategies

• Relative Series Analysis

• Crossover Trading Models

• Breakout Methodology

• Support & Resistance (Floor and Ceiling)

• Risk Management: Stop Loss & Position Sizing

Core Market Mathematics

• Measuring Investment Returns

• Exponential Moving Averages

• Girt Ratio Assessment

• Gain-to-Pain Ratio Metrics

• Calculating Standard Deviation

Python for Financial Analysis

• Data Handling with Pandas

• Numerical Computing using NumPy

• DateTime Operations

• Importing Market Data

• Visualizing Data & Charts

LEARNING TRACK 2

This course is a part of the Learning Track: Technical Analysis Using Quantitative Methods

PREREQUISITES

It is expected that you have some financial markets experience and understand terms like sell, buy, entry, exit positions etc. If you want to be able to code strategies in Python, then experience to store, visualise and manage data using Pandas and DataFrame is required. These skills are covered in our course ‘Python for Trading’.

SYLLABUS

Introduction

In this section, you will get an introduction to the author of the course. You will be guided through the course structure and the various concepts you will learn in the course. Finally, you understand the various features that are available to you on the Quantra Portal.

• About the Author 6m 5s
• About the Course 2m 12s
• Quantra Features and Guidance 3m 48s
• Introduction to Short Selling

Short Selling

In this section, you will understand the concept of short selling and how it is used in trading. You will also learn about the long-short strategy and the necessity of maintaining your inventory of stocks to short.

• Short Selling 1m 54s
• What is Short Selling? 2m
• Need of Short Selling 2m
• Long-Short Strategy 1m 57s
• Stock Performance 2m
• Long-Short Portfolio 2m
• A Lagging Indicator 2m
• Staying Ahead of the Crowd 2m
• Main Points of Long-Short Strategy 2m
• Test on Short Selling 14m

Relative Series

This section covers the concept of relative series and its uses in creating a long-short portfolio. The section also explains the process of creating a relative series in a stepwise manner and then rebasing the series.

• Factors Affecting a Stock 10m
• Which Factors? 2m
• Relative Series 1m 30s
• Uses of Relative Series 2m
• Exchange Index 2m
• Performance of Stock 2m
• Calculating Relative Series 2m 15s
• Factors of Relative Series 2m
• Adjustment Factor 2m
• Relative Series Calculation 2m
• How to Use Jupyter Notebook? 2m 5s
• Compute the Relative Series 10m
• Frequently Asked Questions 10m
• Concatenate Data 5m
• Calculate Adjustment Factor 5m
• Calculate Relative Series 5m
• Rebase the Relative Series 5m

Stock Return Calculation

In this section, you will learn how to calculate the returns of a stock using 2 well-known methods. We compute the arithmetic and logarithmic returns of a stock. We will also understand the use of logarithmic returns and why we use it.

• Return Calculation 10m
• Calculate the Arithmetic Returns 5m
• Calculate the Cumulative Arithmetic Returns 5m
• Calculate the Logarithmic Returns 5m
• Cumulative Logarithmic Returns 2m
• Additional Reading 10m
• Test on Relative Series and Stock Return Calculation 16m

Regime Definition

In this section, you will learn about the three popular regime definitions. You will also learn the drawbacks of using valuations while shorting stocks.

• Regime Definition 3m 25s
• Valuations for Shorting 2m
• Describe a Regime 2m
• Different Regime Methods 2m
• Crossover Method 2m
• Drawbacks of Valuations 2m

Regime Change Detection

In this section, you will learn how to detect a change in the regime using the breakout and the crossover models. You will also learn how to code these two models.

• Breakout/ Breakdown Model 1m 57s
• Breakout Buy 2m
• Breakout Sell 2m
• Advantages of Breakout Model 2m
• Regime Change- Breakout/Breakdown Model 10m
• Calculate the Rolling High 5m
• Calculate the Rolling Low 5m
• Calculate the Regime- Breakout 5m
• Regime Breakdown 5m
• Crossover Model 1m 27s
• Crossover Buy 2m
• Crossover Sell 2m
• Disadvantages of Crossover Model 2m
• Regime Change-Crossover Model 10m
• Calculate Rolling Mean 5m
• Calculate Exponential Mean 5m
• Detect Crossover Regime 5m

Floor and Ceiling

In this section, you will learn how to identify the swing highs and lows and then understand how to iteratively remove local highs and lows to identify the peaks and bottoms of a stock price.

• Floor and Ceiling 2m 14s
• Floor and Ceiling Uses 2m
• Bull Market Pause 2m
• Bear Market Begins 2m
• Bull Market Begins 2m
• Swings 1m 23s
• Alternate Swings 2m
• Swing Highs and Lows 2m
• Peaks 2m
• Distance of Price 2m
• Swings 10m
• Create the Swing Highs 5m
• Create Unified Column 5m
• Floor and Ceiling 10m
• Calculate the Rolling Standard Deviation 5m
• Get the Swing High 5m
• Optional: Lagless Swing Detection 10m

Regime Methods

In the section, you will learn to compare the performance of different regimes discussed in the previous sections.

• Compare Regime Methods 1m 54s
• Best Method 2m
• Regime Method Duration 2m
• Compare the Regimes 10m
• Call the Regime Function 5m
• Test on Regime Definition, Regime Change Detection and Regime Methods 14m

Stock Classification

In this section, you will learn to classify stocks into bulls and bears.

• Classify Stocks to Bulls or Bears 1m 7s
• Stock Screener Steps 2m
• Components of Log 2m
• Classification of Stocks 10m
• Get the Latest Regime 5m
• Test on Floor, Ceiling and Stock Classification 14m

Strategy Creation

In this section, you will understand the logic behind the long-short strategy and create a strategy.

• Overview of Strategy Creation 1m 14s
• Gain Expectancy 2m
• Parts of Gain Expectancy 2m
• Strategy 2m 36s
• Properties of Regime Definition Method 2m
• Best Method for Stop Loss Criterion 2m
• Strategy Logic 1m 35s
• Strategy Creation 10m
• Exit Position 2m
• Create a Signal Function 5m
• Calculate the Stop- Loss Value 5m

Live Trading on Blueshift

This section will walk you through the steps involved in taking your trading strategy live. You will learn about backtesting and live trading platform, Blueshift. You will learn about code structure, various functions used to create a strategy and finally, paper or live trade on Blueshift.

• Section Overview 2m 19s
• Live Trading Overview 2m 41s
• Vectorised vs Event Driven 2m
• Process in Live Trading 2m
• Real-Time Data Source 2m
• Blueshift Code Structure 2m 57s
• Important API Methods 10m
• Schedule Strategy Logic 2m
• Fetch Historical Data 2m
• Place Orders 2m
• Backtest and Live Trade on Blueshift 4m 5s
• Additional Reading 10m
• Blueshift Data FAQs 10m

Live Trading Template

Blueshift Live Trading Template

• Paper/Live Trading Short Selling Strategy 10m
• FAQs for Live Trading on Blueshift 10m

Stop Loss and Position Sizing

In this section, you will learn the different metrics used to measure how good or bad a strategy is. You will also learn about position sizing and stop loss to further solidify our learnings.

• Performance Metrics 2m 51s
• Tail Ratio 2m
• Optimisation 3m 57s
• Mean Reversion Strategies 2m
• Trend Following Strategies 2m
• Drawdown 2m
• Risk Associated With Strategies 2m
• Stop Loss and Position Sizing 3m 13s
• Drawbacks of Equal Weight Algorithms 2m
• Equity At Risk 2m
• Stop Loss & Position Sizing 10m
• Calculate the Drawdown 5m
• Calculate the Grit Index 5m
• Test on Strategy Creation, Stop Loss and Position Sizing 14m

World Stock Screener
Learn to build a global signal engine with multiple techniques across multiple markets and asset classes. Free and easy-to-use data is used for relevant and actionable ideas.
World Stock Screener Notebook 2m

Run Codes Locally on Your Machine

Learn to install the Python environment in your local machine.

• Python Installation Overview 1m 59s
• Flow Diagram 10m
• Install Anaconda on Windows 10m
• Install Anaconda on Mac 10m
• Know your Current Environment 2m
• Troubleshooting Anaconda Installation Problems 10m
• Creating a Python Environment 10m
• Changing Environments 2m
• Quantra Environment 2m
• Troubleshooting Tips For Setting Up Environment 10m
• How to Run Files in Downloadable Section? 10m
• Troubleshooting For Running Files in Downloadable Section 10m

Course Summary

This section includes a downloadable zipped folder with all the IPython notebooks and CSV files used in the course.

1. Course Summary 1m 33s
2. Short Selling in Current Market
3. Python Codes and Data

ABOUT AUTHOR

Laurent Bernut
Laurent Bernut, Founder & CEO of ASC, has extensive experience in the alternative investment industry, having worked with Fidelity Investments, Rockhampton, and Ward Ferry. At Fidelity, he served as a specialist short seller, tasked with underperforming during Japan’s longest bear market in modern history. His work in creating alpha within alternative strategies is rooted in a systematic, rules-based trading methodology that has been tested and refined across global markets.

WHY QUANTRA®?

• Maximize learning in less time

• Learn directly from seasoned professionals

• Study flexibly at your own pace

• Access data sets and strategy templates to practice independently

REVIEWS

ZUO ZHENG – Investment Analyst, Semir Group, China
In my view, Laurent Bernut’s course is outstanding — not only the best for short selling, but one of the top trading courses overall. The included source code provides deep insights, and the variations of strategy design were truly eye-opening. I’ve already started using the concepts to build my own models. Three rare takeaways that stand out:

1. Using regime calculations on rebased series instead of absolute values gives a major competitive edge.

2. Mastering the art of spotting tops and bottoms is a crucial skill every trader should learn.

3. While retail traders often believe in multi-timeframe alignment, professionals focus on scaling in and out to generate profits.

APOORV TIWARI – Vice President, Barclays, India
Laurent Bernut’s short selling program is exceptionally well structured, offering powerful insights. The explanation of regime concepts is clear and supported with practical code examples. His lessons on risk management — especially regarding position sizing — are extremely valuable. Beyond the material itself, what impressed me most was the responsiveness of both the support team and Laurent himself in addressing questions. This made the learning highly engaging and interactive, making it one of the most effective training modules I’ve come across.