Covered short: Difference between revisions
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Amwelladmin (talk | contribs) (Created page with "A short sale which you have “covered” by borrowing securities under a stock loan, or at least obtaining a “locate” from a stock lender. Compare with a...") |
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A [[short sale]] which you have “covered” by borrowing [[securities]] under a [[stock loan]], or at least obtaining a “[[locate]]” from a stock lender. Compare with a [[naked short]] where you sell outright, without getting in a borrow, in the hope you can acquire stock at a cheaper price | {{a|g|}}A [[short sale]] which you have “covered” by borrowing [[securities]] under a [[stock loan]], or at least obtaining a “[[locate]]” from a stock lender. Compare with a [[naked short]] where you sell outright, without getting in a borrow, in the hope you can acquire stock at a cheaper price by the time of settlement. [[Naked short]]s are disruptive, leading to settlement failures, and are generally frowned upon, and regulated against in the EU, by the lights of the [[EU Short Selling Regulations]]. | ||
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Latest revision as of 14:20, 18 March 2020
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A short sale which you have “covered” by borrowing securities under a stock loan, or at least obtaining a “locate” from a stock lender. Compare with a naked short where you sell outright, without getting in a borrow, in the hope you can acquire stock at a cheaper price by the time of settlement. Naked shorts are disruptive, leading to settlement failures, and are generally frowned upon, and regulated against in the EU, by the lights of the EU Short Selling Regulations.