short selling
The practice of selling securities not owned by the seller in the hope that the price subsequently falls and they can then be bought back at a lower price. The seller may have borrowed the necessary securities on a temporary basis in order to deliver the stock to the buyer, or may not hold them at all (referred to as a naked short). In both cases, the related security must be purchased at a later stage to close out the transaction.
+ short selling
USA
The practice of a seller, anticipating a decline in the price of a certain security, selling securities that he does not own, with the intention of acquiring the securities at a lower price in the future. The seller has a "short position" from the time when the securities are sold until the time when the seller acquires the securities. A short sale includes any sale that is consummated by the delivery of a security borrowed by, or for the account of, the seller. In order to deliver the security to the purchaser, the short seller may borrow the security, typically from a broker-dealer or an institutional investor. The short seller later closes out the position by purchasing equivalent securities on the open market, or by using an equivalent security it already owns, and returning the security to the lender. In general, short selling is used to profit from an expected downward price movement, to provide liquidity in response to unanticipated demand, or to hedge the risk of a long position in the same security or in a related security. "Naked short selling" refers generally to an investor selling short without having guaranteed that securities are available for delivery to the buyer. Essentially, in a naked short sale, the short seller does not formally borrow the securities before shorting nor does the seller have a positive confirmation that the dealer is in a position to lend the shorted securities. In addition, the short seller does not meet the standard requirement for settlement by delivery of shares within three days of the trade (T+3).
Refer to Practice Note, Short Selling: Regulation and Reporting (www.practicallaw.com/0-384-8335) for detailed information on short selling, including an example of the actual mechanics of a short sale.

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

Look at other dictionaries:

  • short-selling — UK [ˌʃɔː(r)tˈselɪŋ] / US [ˌʃɔrtˈselɪŋ] or shorting UK / US noun [uncountable] economics the practice of selling borrowed securities and then buying them again at a lower price Derived word: short sell verb intransitive/transitive …   English dictionary

  • Short selling — Establishing a market position by selling a security one does not own in anticipation of the price of that security falling. The New York Times Financial Glossary * * * short selling short selling ➔ selling * * *    The selling of instruments… …   Financial and business terms

  • short selling — Establishing a market position by selling a security one does not own in anticipation of the price of that security falling. Bloomberg Financial Dictionary * * * short selling short selling ➔ selling * * *    The selling of instruments that are… …   Financial and business terms

  • Short-Selling — Unter Leerverkauf (auch: Blankoverkauf, Short Sale) versteht man den Verkauf einer Ware, eines Währungsbetrages oder eines Wertpapiers, das der Verkäufer zum Verkaufszeitpunkt noch nicht besitzt. Der Verkäufer profitiert von dem Leerverkauf, wenn …   Deutsch Wikipedia

  • Short Selling — Unter Leerverkauf (auch: Blankoverkauf, Short Sale) versteht man den Verkauf einer Ware, eines Währungsbetrages oder eines Wertpapiers, das der Verkäufer zum Verkaufszeitpunkt noch nicht besitzt. Der Verkäufer profitiert von dem Leerverkauf, wenn …   Deutsch Wikipedia

  • short selling — noun sale of securities or commodity futures not owned by the seller (who hopes to buy them back later at a lower price) • Syn: ↑short sale • Hypernyms: ↑trading * * * noun Etymology: short (I) + selling (a …   Useful english dictionary

  • Short Selling — The selling of a security that the seller does not own, or any sale that is completed by the delivery of a security borrowed by the seller. Short sellers assume that they will be able to buy the stock at a lower amount than the price at which… …   Investment dictionary

  • short selling — Selling commodities, securities, currencies, etc. , that one does not have. A short seller expects prices to fall so that the short sale can be covered at a profit before the goods have to be delivered. A short seller is a bear …   Big dictionary of business and management

  • short selling — /ʃɔt ˈsɛlɪŋ/ (say shawt seling) noun Stock Exchange the selling of a borrowed security with the obligation to purchase it back and return it at a later date, the borrower in the meantime hoping to gain on the transaction by selling it at a high… …   Australian English dictionary

  • short selling — noun The practice of selling items or stock which one does not currently possess …   Wiktionary

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