Short-selling (also in German; more rarely bearish speculation)

In general, the attempt to make a profit from falling prices on a market (the practice of investors borrowing assets to sell them in the hope that they can buy them back at a lower price and profit from the difference). – Let’s assume that on the financial market the price of Greek government bonds at a nominal (in money terms) EUR 100 today is EUR 90. The short seller expects the price to fall further. He borrows 100 bonds from a broker today, pays EUR 9,000 for them and sells them today at the daily price of EUR 90. At the agreed date, the short seller must now return the securities to the broker. If his expectations were correct, he can now buy this bond at 80 EUR per unit; he therefore has to pay 8,000 EUR and has made a profit of 1,000 EUR. If, however, the price of Greek government bonds rose to 100, the short seller would have to accept a loss of 1,000 EUR. – See short selling, position, uncovered, bond arbitrage, short selling fund, speculation, snake trading, stock jobber,

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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