Short Sale

verfasst von HB, 19.02.2003, 13:41

-->Borrowing a security (or commodity futures contract) from a broker and selling it, with the understanding that it must later be bought back (hopefully at a lower price) and returned to the broker. Short selling (or"selling short") is a technique used by investors who try to profit from the falling price of a stock. For example, consider an investor who wants to sell short 100 shares of a company, believing it is overpriced and will fall. The investor's broker will borrow the shares from someone who owns them with the promise that the investor will return them later. The investor immediately sells the borrowed shares at the current market price. If the price of the shares drops, he/she"covers the short position" by buying back the shares, and his/her broker returns them to the lender. The profit is the difference between the price at which the stock was sold and the cost to buy it back, minus commissions and expenses for borrowing the stock. But if the price of the shares increase, the potential losses are unlimited. The company’s shares may go up and up, but at some point the investor has to replace the 100 shares he/she sold. In that case, the losses can mount without limit until the short position is covered. For this reason, short selling is a very risky technique. SEC rules allow investors to sell short only on an uptick or a zero-plus tick, to prevent"pool operators" from driving down a stock price through heavy short-selling, then buying the shares for a large profit.

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convertible bond

A corporate bond, usually a junior debenture, that can be exchanged, at the option of the holder, for a specific number of shares of the company's preferred stock or common stock. Convertibility affects the performance of the bond in certain ways. First and foremost, convertible bonds tend to have lower interest rates than non-convertibles because they also accrue value as the price of the underlying stock rises. In this way, convertible bonds offer some of the benefits of both stocks and bonds. Convertibles earn interest even when the stock is trading down or sideways, but when the stock prices rises, the value of the convertible increases. Therefore, convertibles can offer protection against a decline in stock price. Because they are sold at a premium over the price of the stock, convertibles should be expected to earn that premium back in the first three or four years after purchase. In some cases, convertibles may be callable, at which point the yield will cease.

<ul> ~ Investorwords</ul>

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gesamter Thread:

• Deutsche Telekom beraubt sich selbt möglichen Kurspotentials - nasdaq, 19.02.2003, 12:29
  • Drei Fragen - Der Bulle, 19.02.2003, 12:46
    • Re: Drei Fragen - Giraldus, 19.02.2003, 13:12
      • Aha, danke! - Der Bulle, 19.02.2003, 13:29
        • Short Sale - HB, 19.02.2003, 13:41
        • Re: Wegen der Wandelanleihen und Shortselling:-) - Luigi, 19.02.2003, 14:00
          • Re: Die Anleihe mit Link (owT) - Luigi, 19.02.2003, 14:02
          • Re: Feher: um Aktien zurück zu kaufen muss es heissen! (owT) - Luigi, 19.02.2003, 14:04
            • @Elli bitte hilf mir aus meinem Rechtschreibchaos! (owT) - Luigi, 19.02.2003, 14:07
              • Re: @Elli bitte hilf mir aus meinem Rechtschreibchaos! / wie denn? ;-) (owT) - - ELLI -, 19.02.2003, 14:24
                • Re: @Elli Danke für die Korrektur:-) (owT) - Luigi, 19.02.2003, 14:45
        • sehe ich etwas anders! - nasdaq, 19.02.2003, 17:49
          • Re: @nasdaq Oh du mein Guru:-) Stimmt es etwa nicht, dass die Wandelanleihe - Luigi, 19.02.2003, 18:03
            • meinte ein anderes Posting - nasdaq, 19.02.2003, 19:28