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


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Home | 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