A hedge fund that, in its estimation, borrows overvalued stocks – for a fixed period of time and sells them – immediately on the market. The fund managers count on being able to buy back the shares cheaper at a later date and then close out their account with the lender (broker). – The funds generated from the sale of the shares are usually invested in other assets, which then serve primarily as collateral for the repurchase of the shares. – A short seller suffers a loss if he is wrong in his assumptions and the borrowed shares increase in value. He then has to buy back these securities at a now higher price. – See hedge fund strategies, index arbitrage, short selling, risk, short position, single hedge fund, value fund, zombie bank.
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/