   
|
|
Shorting
|
| FYI - For 2011, Dow up, Dogs of the Dow up more (double digits) |
| |
Shorting a stock or other asset is the selling of something not yet owned. Whereas buying, or going long an asset is an attempt to profit from a rise in price, shorting is a bet that price will decrease. In the United States, shorting is heavily regulated. Shorting requires the trader's broker to "borrow" the stock from someone who is long the shares. Unless this can be arranged, shorting is not permitted. This restricts the number of shares available for shorting. In much of the world, so-called naked shorting, where no "borrow" is required, is completely legal.
Shorting is the subject of much speculation and numerous conspiracy theories. Companies involved in stock fraud will sometimes blame so-called illegal naked shorting for their low share price. In an attempt to provide more transparency, Nasdaq initiated the SHO list; stocks on the SHO list are not available for shorting until the exchange receives more detailed information on recent trading patterns.
Rate this shorting definition...
|
|
Where is the market headed? The answer may surprise you. Find out
right now with the exclusive & Barron's recommended charts of Chart of the Day.
|
Popular Terms: option premium, deferred revenue, annual return, per diem, inflation, 144a, Zero Cost Collar, current ratio, 1035 exchange, labor relations, retained earnings, 401a, liquidity ratio, irrevocable trust, Key Rate Duration, risk management, debt service coverage, balance sheet, deferred tax, quality assurance, dividends payable, class C shares, ex-dividend date, stock split, ex-dividend, 1031 exchange, command economy, reverse mortgage, stock market close, EBITDA, margin rate, LIBOR, required rate of return, FICO score, VIX, limit order, APR, minority interest, open position, implied volatility, average price per share, phantom income, FTSE, real GDP, diluted share, wholly-owned subsidiary, in escrow, cancelled check, covered put
|
|
| |