• A market participant assumes a short position by selling as security he does not own. The seller makes delivery by borrowing the security sold or reversing it in.

• The term used to describe the selling of a security, contract, or commodity not owned by the seller. For example, an investor who borrows shares of stock from a broker-dealer and sells them on the open market is said to have a short position in the stock. See also: Long.

• Is the position opposite that of a long. Some who is short the market.

• 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. Related: Long.


Follow this link for all the terms related to short.

 Embedded terms in definition
Long position
Short position
 Referenced Terms
 Accounts payable: Money owed by a company and payable within one year. It is listed on the Balance Sheet under Current Liabilities.Short term liabilities which reflect the amount owed vendors and suppliersMoney owed to suppliers.

 Accounts receivable: Short term assets reflecting the amount owed by customers from the sale of product or services on creditMoney owed to a business for merchandise or services sold on an open account. It is found on the Balance Sheet under Current Assets. It is used in analyzing a company's liquidity.Money owed by customers.

 Actual hedging: Is the risk management of a position when a hedger has a bona fide long or Short actual position and is involved in an offsetting transaction. This offset is usually in the derivatives market.

 Assignment: The receipt of an exercise notice by an options writer that requires the writer to sell (in the case of a call) or purchase (in the case of a put) the underlying security at the specified strike price.Is the action for the seller of the option of acquiring the opposite position when an option is exercised. When a put is exercised, the writer receives a long position in securities or a long futures contract. When a call is exercised, the writer receives a Short position in the securities or a short futures contract.A voluntary liquidation procedure by which a firm's creditors pass the power to liquidate the firm's assets to an adjustment bureau, a trade association, or a third party, which is designated the assignee.

 Average percent payout: The average of the percentage of a company's profits paid out in dividends to shareholders, typically calculated over the last five years. A high percent payout can be a danger sign. Recent payout figures higher than 50%, and higher than the average payout, may forewarn of a dividend cut. A dividend cut would likely cause the stock price to fall. Generally, the higher the payout ratio, the lower the expected growth rate for the company's EPS in the future.
Sometimes, although the dividend payout is more than earnings, the company has strong cash flow and can cover the dividend in the Short term. However, a company paying out dividends in excess of earnings on a recurring basis is a risky investment.

 Related Terms

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