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Definition of Short position
Occurs when a person sells stocks he or she does not yet own. Shares must be borrowed,
The sale of an investment, particularly by someone who does not yet own it.
The sale of a security or financial instrument not
To cover, offset or close out a short position. Related: evening up, liquidation.
To eliminate a long or short position, leaving no ownership or obligation.
A transaction in which the purchaser's intention is to reduce or eliminate a short position in
The purchase of a contract to offset a previously established short position.
The risk that a long or short position in a foreign currency might have to be closed out
A portfolio consisting of the long position in the stock and the short position in the call
When a firm's business is terminated, assets are sold, proceeds pay creditors and any leftovers
An options position where a person has executed one or more option trades where the net
Elimination of a long or short position by making an opposite transaction. Related: liquidation.
A net long or short position whose value will change with a change in prices.
A transaction in which the seller's intention is to create or increase a short position in a given
A market commitment; the number of contracts bought or sold for which no offsetting transaction
Procedure by which the Long or short position of an individual is offset by an opposite
Sources of funds internally provided from operations that alter a company's
Voluntary arrangement to restructure a firm's debt, under which payment is reduced.
Under certain circumstances, taxation rules assume that a transfer of property has occurred, even though there has not been an actual purchase or sale. This could happen upon death or transfer of ownership.
Fallacy of Composition
The incorrect conclusion that something that is true for an individual is necessarily true for the economy as a whole.
Status of a firm's assets, liabilities, and equity accounts as of a certain time, as shown in its financial statement.
Limitation on asset dispositions
A bond covenant that restricts in some way a firm's ability to sell major assets.
Outright ownership of a security or financial instrument. The
Purchase of an investment.
MM dividend-irrelevance proposition
Theory that under ideal conditions, the value of the firm is unaffected by dividend policy.
MM's proposition I (debt irrelevance proposition)
The value of a firm is unaffected by its capital structure.
MM's proposition II
The required rate of return on equity increases as the firm’s debt-equity ratio increases.
Modigliani and Miller Proposition I
A proposition by Modigliani and Miller which states that a firm cannot
Modigliani and Miller Proposition II
A proposition by Modigliani and Miller which states that the cost of
Theory that anticipated policy has no effect on output.
Diagram showing the possible payoffs from a derivative investment.
If an investor thinks the price of a stock is going down, the investor could borrow the stock from
One who has sold a contract to establish a market position and who has not yet closed out this position
Bonds with short current maturities.
See: unmatched book.
The sale of a futures contract(s) to eliminate or lessen the possible decline in value ownership of
This is the total number of shares of a security that investors have borrowed, then sold in the
The annualized one-period interest rate.
Short-run operating activities
Events and decisions concerning the short-term finance of a firm, such as
Selling a security that the seller does not own but is committed to repurchasing eventually. It is
Establishing a market position by selling a security one does not own in anticipation of the price
A situation in which a lack of supply tends to force prices upward.
A straddle in which one put and one call are sold.
Short-term financial plan
A financial plan that covers the coming fiscal year.
Short-term investment services
Services that assist firms in making short-term investments.
Short-term solvency ratios
Ratios used to judge the adequacy of liquid assets for meeting short-term
Short-term tax exempts
short-term securities issued by states, municipalities, local housing agencies, and
Costs that fall with increases in the level of investment in current assets.
Costs incurred from shortages in current assets.
The risk of falling short of any investment target.
Take a position
To buy or sell short; that is, to have some amount that is owned or owed on an asset or
A short call option position in which the writer owns the number of shares of the underlying
A put option position in which the option writer also is short the corresponding stock or has
The written notice given by the seller of his intention to make delivery against an open, short
Flat price risk
Taking a position either long or short that does not involve spreading.
One who has bought a contract(s) to establish a market position and who has not yet closed out this
Naked option strategies
An unhedged strategy making exclusive use of one of the following: Long call
Performance attribution analysis
The decomposition of a money manager's performance results to explain
Liquidating an existing position and simultaneously reinstating a position in another futures
Technical condition of a market
Demand and supply factors affecting price, in particular the net position,
A short call option position in which the writer does not own shares of underlying stock
A short put option position in which the writer does not have a corresponding short stock
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