Short selling


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Related to Short selling: hedging

Short selling

Establishing a market position by selling a security one does not own in anticipation of the price of that security falling.

Short Sale

The sale of borrowed securities. In a short sale, one borrows securities, usually from a brokerage, and sells them. One then buys the same securities in order to repay the brokerage. Selling short is practiced if one believes that the price of a security will soon fall. That is, one expects to sell the borrowed securities at a higher price than the price at which one will buy in order to return the securities. Selling short is one of the most common practices of hedge funds. This is also called establishing a bear position. See also: Margin account.
References in periodicals archive ?
With this example, we can pretty much reconstruct the short selling process of short-sellers.
If the fundamental price is truly 20 percent below the previous closing while the rule discourages short selling after a 10 percent drop, buyers at that price may end up losing 10 percent of their investment.
In May, German financial regulator BaFin banned naked short selling on a number of securities in a bid to curb speculative trading.
ASIC also encourages short sellers and system developers to continue to monitor ASIC Information Sheet 98 Short selling, which includes key tasks and practical information they must be aware of prior to the start date for the new reporting requirements.
net is a service designed to combat short selling and naked short selling in US stocks.
The Company intends to vigorously pursue, with the assistance of regulatory agencies, stock exchanges and its industrial relations advisors, more definitive information on short selling practices and their possible impact on share performance.
Cameron Funkhouser, NASD's senior vice president of market regulations, told the forum that NASD had found no evidence of rampant naked short selling.
29, 2003, by implementing a new rule to ban naked shorting in order to protect thinly traded stocks that are vulnerable to aggressive short selling which would cause the stock price to fall.
Manipulative naked short selling by broker-dealers operates as a fraud on the market causing investors to lose confidence in the fairness and legitimacy of OTC markets," Cromwell wrote in his petition.
While short selling may have its place in fair market practices," said PRRM President Dan Burgess, "naked short selling undermines the market's ability to justly and accurately reflect the price of equity securities, untowardly affecting issuers and investors alike.
The SEC's recent SHO list with a 'grand-fathered' clause to forgive the past illegalities of short selling American securities is an attempted cover-up of this ongoing scandal.
The Depository Trust & Clearing Corporation (DTCC) has provided its bank and broker customers with a detailed explanation of its Stock Borrow program and the issue of naked short selling in an effort counter a widespread campaign of distortions and misleading information.