Investor Glossary-shortingInvestor Glossary-shortingInvestor Glossary-shortingInvestor Glossary-shortingInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Shorting

The HTML to link to this page
 

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...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: in escrow, wholly-owned subsidiary, risk management, phantom income, class C shares, deferred tax, minority interest, 1031 exchange, command economy, stock market close, VIX, 144a, average price per share, cancelled check, deferred revenue, 401a, 1035 exchange, EBITDA, required rate of return, debt service coverage, option premium, current ratio, margin rate, open position, limit order, reverse mortgage, FICO score, Zero Cost Collar, covered put, ex-dividend, FTSE, real GDP, liquidity ratio, LIBOR, labor relations, balance sheet, implied volatility, Key Rate Duration, irrevocable trust, diluted share, quality assurance, retained earnings, stock split, inflation, APR, ex-dividend date, dividends payable, annual return, per diem


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Investor Glossary | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use