Short Sale

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Short sale

Selling a security that the seller does not own but is committed to repurchasing eventually. It is used to capitalize on an expected decline in the security's price.

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.

short sale

The sale of a security that must be borrowed to make delivery. Short sales usually, but not always, entail the sale of securities that are not owned by the seller in anticipation of profiting from a decline in the price of the securities. A short sale is not permitted when the last preceding different price was higher than the current price. Also called selling short, short. See also fictitious credit, ghost stock, lending at a premium, lending at a rate, odd-lot short sales, Rule 10a-1, short against the box, short cover, synthetic short sale.

short sale

In real estate,the lender's agreement to release its lien upon property so that the property can be sold, even though the sale price will not generate enough money to pay off the loan. Investors who specialize in purchasing preforeclosure properties will often negotiate a short sale price with the lender as part of their strategy.Oftentimes,the lender will agree to forgive the balance of the mortgage debt.

Short Sale

An agreement between a mortgage borrower in distress and the lender that allows the borrower to sell the house and remit the proceeds to the lender.

Ashort sale is an alternative to foreclosure or a deed in lieu of foreclosure. See Payment Problems/Position of the Lender/Permanent Problem.

Short Sale

A sale in which the seller borrows the stock certificates or other property delivered to the buyer. At a later date, the seller either purchases similar stock or property necessary to "cover" the sale, and delivers it to the lender or delivers to the lender stock or property that he or she already held but did not wish to transfer at an earlier date. For income tax purposes, there is no gain or loss on the transaction until the short sale is covered by purchase and transfer. Special rules apply in determining whether the gain or loss on a short sale is a long-term or short-term capital gain or loss.
References in periodicals archive ?
There is a network of organisations that stands to profit by association with short-selling research companies such as Muddy Waters Research, Anonymous Analytics, and Glaucus.
Since its establishment six years ago, Muddy Waters Research has short-sold seven Hong Kong listed companies, and its latest attack was during 16-19 December 2016, when it released two short-selling reports on China Huishan Dairy (6863.
The effects of these short-selling reports vary, but the targeted company usually suffers a big drop or amplitude on the same day.
Using Glaucus's short-sale of Fullshare as an example, according to inside sources, Glaucus and other short-sellers already had their plan laid on 10 February 2017, but when substantial profits couldn't be made, they published the short-selling report to maximise their profits.
The WSE has undertaken a number of activities to explain the short-selling initiative to market participants, including participation in a seminar held by Deutsche Bank's domestic custody services business in London on 18 June.
When we talk to large derivatives players in London, they mention the lack of arbitrage opportunities and short-selling is often raised as an obstacle," he said.
When the ban was introduced, FSA chief executive Hector Sants said that while short-selling was a legitimate investment technique in normal market conditions, "extreme circumstances" had given rise to "disorderly markets".
Although the FSA will be reintroducing short-selling, it will keep some weaker rules requiring firms to disclose short positions beyond certain thresholds.
There were fears that reintroducing short-selling could cause the value of banks' shares to drop sharply at a crucial time for the country's economy.
What has changed since the original crisis is that the Government is now part-owner of these banks into which short-selling is going to be reintroduced.