Going Long, Going Short
The investor’s market position is defined in relation to her broker. If she’s long in a stock, it means she owns the shares in her brokerage account. If the stock goes up, she can sell the shares and make a profit. If she has a margin account, meaning one that allows her to borrow money or securities from the broker, she can sell a stock short. Selling short means an investor sells shares she doesn’t own.She must buy and deliver the shares at some point in the future. In order to insure the shares will be available to complete the short sale, she must borrow them from her broker at the time she starts the short sale. The shares therefore are in her account, but they actually belong to the brokerage firm.
Tory Stearns
Tory has been writing for over 10 years and has built a strong following of readers who enjoy his unique perspective and engaging writing style. When he's not busy crafting blog posts, Tory enjoys spending time with his friends and family, traveling, and trying out new hobbies.
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