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Short sale: Difference between revisions
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The practice of selling a security you don’t own in the first place, meaning you have negatively [[correlation|correlated]] [[exposure]] to the price of the security. To do this you will need to borrow the stock under a [[stock loan]] | The practice of selling a security you don’t own in the first place, meaning you have negatively [[correlation|correlated]] [[exposure]] to the price of the security. To do this you will need to [[borrow]] the stock under a [[stock loan]], and the agreement you will want for that, if you’re in the English speaking world outside America, will be the {{gmsla}}. | ||
Short selling is risky for you — your losses can be conceptually infinite — and for the issuers of the securities you short sell, especially if they happen to be financial institutions. Therefore this activity is regulated in many jurisdictions, including the {{EU}} in their wonderfully entexted [[EU Short Selling Regulations]]. | |||
{{Seealso}} | |||
*[[stock loan]] | *[[stock loan]] | ||
[[EU Short Selling Regulations]] | *{{gmsla}} | ||
*[[EU Short Selling Regulations]] | |||
{{C2|Regulation|Stock lending}} | {{C2|Regulation|Stock lending}} | ||