liquidate a position


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Liquidation

The conversion to cash. Liquidating a position may simply mean selling stock or bonds; the seller in this case receives the cash. Liquidation also refers to a situation in which a company ceases operations and sells as many assets as it can; the company uses the cash to repay debt and, if possible, shareholders. Liquidation often has a negative connotation for this reason. See also: Panic selling.

liquidate a position

To sell all the stock or debt securities of a particular type. For example, a portfolio manager might decide to liquidate a position in a stock by selling all the shares of that stock held in the portfolio. A variety of reasons may induce the investor to do this, but the most common one is simply a belief that the security price will fall.