Short sale

Similar financial terms

Short-term bonds
Bonds with a maturity of between one and five years.

Short selling
Short selling, usually just referred to as "shorting", involves selling an asset that is not in posession. Suppose an investor instructs a broker to short 20,000 STL shares. The broker will carry out the instructions by borrowing the shares from another client and selling them in the market in the usual way. The investor can maintain the short position for as long as desired, provided there are always shares for the broker to borrow. At some stage, however, the investor will close out the positi ...

Short-squeezed
If the broker runs out of shares to borrow at any time while a short contract is open, the investor is short-squeezed and is forced to close out the position immediately even if not ready to do so.

Short Term Gain
The profit realized from the sale of securities or other capital assets possessed for twelve months or less.

Creditors, short
This is all current liabilities payable on demand or within one year of the Balance Sheet date. For Banks this also includes short term bank liabilities such as deposits.

Synthetic short sale
Buy one put option and write one call option.

Short-term tax exempts
Short-term securities issued by states, municipalities, local housing agencies, and urban renewal agencies.

Short-term solvency ratios
Ratios used to judge the adequacy of liquid assets for meeting short-term obligations as they come due, including (a) the current ratio, (b) the acid-test ratio, (c) the inventory turnover ratio, and (d) the accounts receivable turnover ratio.

Short-term investment services
Services that assist firms in making short-term investments.

Short-term financial plan
A financial plan that covers the coming fiscal year.

Short-run operating activities
Events and decisions concerning the short-term finance of a firm, such as how much inventory to order and whether to offer cash terms or credit terms to customers.

Shortfall risk
The risk of falling short of any investment target.

Shortage cost
Costs that fall with increases in the level of investment in current assets.

Short straddle
A straddle in which one put and one call are sold.

Short position
Occurs when a person sells stocks he or she does not yet own. Shares must be borrowed, before the sale, to make "good delivery" to the buyer. Eventually, the shares must be bought to close out the transaction. This technique is used when an investor believes the stock price will go down.

Short interest
This is the total number of shares of a security that investors have borrowed, then sold in the hope that the security will fall in value. An investor then buys back the shares and pockets the difference as profit.

Short hedge
The sale of a futures contract(s) to eliminate or lessen the possible decline in value ownership of an approximately equal amount of the actual financial instrument or physical commodity.

Short bonds
Bonds with short current maturities.

Short
One who has sold a contract to establish a market position and who has not yet closed out this position through an offsetting purchase; the opposite of a long position.

Selling short
If an investor thinks the price of a stock is going down, the investor could borrow the stock from a broker and sell it. Eventually, the investor must buy the stock back on the open market. For instance, you borrow 1000 shares of British Petroleum on July 1 and sell it for £8 per share. Then, on Aug 1, you purchase 1000 shares of BP at £7 per share. You've made £1000 (less commissions and other fees) by selling short.

Cost of sales
The costs associated with generating reported sales, including merchandise, direct labor, and other costs attributed to current sales activity.

Growth in sales
A ratio comparing sales levels to sales in a base year; it identifies the percentage of increase in volume.

Wholesale mortgage banking
The purchasing of loans originated by others, with the servicing rights released to the purchaser.

Terms of sale
Conditions on which a firm proposes to sell its goods services for cash or credit.

Swap sale
A swap sale (also referred to as a swap assignment) is a transaction that ends one counterparty's role in an interest rate swap by substituting a new counterparty whose credit is acceptable to the other original counterparty.

Substitute sale
A method for hedging price risk that utilizes debt-market instruments, such as interest rate futures, or that involves selling borrowed securities as the primary assets.

Sales-type lease
An arrangement whereby a firm leases its own equipment, such as Acer leasing its own computers, thereby competing with an independent leasing company.

Sales forecast
A key input to a firm's financial planning process. External sales forecasts are based on historical experience, statistical analysis, and consideration of various macroeconomic factors.

Sales charge
The fee charged by a mutual fund when purchasing shares, usually payable as a commission to marketing agent, such as a financial advisor, who is thus compensated for his assistance to a purchaser. It represents the difference, if any, between the share purchase price and the share net asset value.

Sale and lease-back agreement
Sale of an existing asset to a financial institution that then leases it back to the user.

Purchase and sale
A method of securities distribution in which the securities firm purchases the securities from the issuer for its own account at a stated price and then resells them, as contrasted with a best-efforts sale.

Price/sales ratio
Determined by dividing current stock price by revenue per share (adjusted for stock splits). Revenue per share for the P/S ratio is determined by dividing revenue for past 12 months by number of shares outstanding.

Opening sale
A transaction in which the seller's intention is to create or increase a short position in a given series of options.

Negotiated sale
Situation in which the terms of an offering are determined by negotiation between the issuer and the underwriter rather than through competitive bidding by underwriting groups.

Limitation on sale-and-leaseback
A bond covenant that restricts in some way a firm's ability to enter into sale and lease-back transactions.

Limitation on merger, consolidation, or sale
A bond covenant that restricts in some way a firm's ability to merge or consolidate with another firm.

Best-efforts sale
Best efforts is a method of securities distribution or underwriting in which the securities firm agrees to sell as much of the offering as possible and return any unsold shares to the issuer. As opposed to a guaranteed or fixed price sale, where the underwriter agrees to sell a specific number of shares (with the securities firm holding any unsold shares in its own account if necessary).

Closing sale
A transaction in which the seller's intention is to reduce or eliminate a long position in a stock, or a given series of options.

Conditional sales contracts
Similar to equipment trust certificates except that the lender is either the equipment manufacturer or a bank or finance company to whom the manufacturer has sold the conditional sales contract.

Contingent deferred sales charge (CDSC)
The formal name for the load of a back-end load fund.

Garage sale
Sale of unwanted items at extremely low prices.