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Short position


An investor's position where the number of contracts sold exceeds the number of contracts bought. For example, someone who is short in a stock does not own the stock, but is under the obligation to deliver shares of the stock at some future time. Someone who has a short position is a net seller.

The result of selling a financial instrument not owned at the time of sale. This strategy is undertaken when the short seller anticipates a price decline, in which case the seller can make delivery on the short sale with securities subsequently purchased at a lower price, thereby earning a profit roughly equal to the spread.

The opposite of a Long position.


Steven Huddart
Smeal College of Business, Penn State University, University Park, PA 16802-3603 USA
(814) 863-0048
huddart@psu.edu
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http://personal.psu.edu/sjh11/OptionGlossary/ShortPosition.shtml
was last updated on Tue, Aug 21, 2018.
Today is Sun, Sep 22, 2019.

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