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Stock loan: Difference between revisions
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{{ | {{gmslaanat|2.3}}A strange beast. Actually a type of financing transaction, though it is clothed it the language of [[buy]] and [[sell]]. | ||
===Why?=== | ===Why?=== | ||
Start out with what it is ''for''. Let’s say a well-meaning [[hedge fund]] wants to bet against the price of a security. It does that by “[[short selling]]”. The key economic feature of a short sale is that you sell a security you don’t own in the first place. If you own it and sell it — well, that’s just a sale. | Start out with what it is ''for''. Let’s say a well-meaning [[hedge fund]] wants to bet against the price of a security. It does that by “[[short selling]]”. The key economic feature of a short sale is that you sell a security you don’t own in the first place. If you own it and sell it — well, that’s just a sale. | ||