Securities Lawyer 101 l Brenda Hamilton

Securities Lawyer 101 l Brenda Hamilton

Friday, May 17, 2013

Naked Shorts 101

In recent years, the activities of short sellers have been the subject of controversy. While short selling is a simple process it is widely misunderstood. While the average investor profits when it invests in a stock whose price goes up, a short seller profits when it invests in a stock whose price goes down. Simply put, a short sale is the sale of a security that the seller does not own. In order to cover their sale of the stock old in a short sale, the short seller must either purchase the security to cover or borrow it from a third party. In some instances short sellers seek to hedge the risk of a long position in the same security.

http://www.securitieslawyer101.com/naked-short/

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