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 ?
In a separate stream of literature, Diamond and Verrecchia (1987) hypothesize that short-selling activity will predict negative returns.
Short-selling and market-neutral strategies can be very rewarding to plan beneficiaries if the plan sponsor is willing to take the time and effort necessary to become involved and understand today's complex capital markets.
Noteworthy, the FRA chairperson issued in February the regulatory decision No 268 for the year 2019 on the rules of securities borrowing operations with the purpose of short-selling to activate the mechanism, while the EGX and MCDR would prepare the technical requirements for activating the mechanism.
Prior to executing short-selling orders, trading participants will have to ensure the client has entered into the necessary securities borrowing arrangements.
"We are always keen to be among the first in introducing new investment products that will contribute to the development of our stock markets." said Mohammad Al Mortada Al Dandashi, Managing Director of Al Ramz Corporation Investment & Development PJSC, "We strongly believe that activating advanced financial instruments and trading mechanisms like short-selling will ultimately help balance the trading forces in our capital markets.
Notable short-selling research firms in the market include Muddy Waters Research, Glaucus Research, Citron Research, and Anonymous Analytics.
In the current short-selling cycle, crude prices have generally fallen less than during previous cycles, especially the wave of short-selling that started in October 2015 and saw oil prices tumble below $30 at the start of 2016.
However, other studies have shown that short-selling activity is not abnormally high prior to negative news events as short sellers are generally reactive as opposed to being proactive prior to firm-specific announcements (Daske, Richardson, and Tuna, 2005; Blau and Pinegar, 2012; Blau and Wade, 2012; Engelberg, Reed, and Ringgenberg, 2012).
In turn, the Portugese watchdog, Commissao do Mercado de Valores Mobiliarios, in Lisbon said it was temporarily banning short-selling in Banif, Millennium bcp, Banco Espirito Santo and Sonae Industria.
SPAIN has banned short-selling of shares for three months following falls in European markets.
The Financial Service Agency said Thursday it has adopted a new restriction on short-selling of shares in connection with public offerings to prevent unfair formation of share prices, effective the same day.