What Does Long & Short in the Stock Market Mean?

“With stocks, a long position means an investor has bought and owns shares of stock. On the flip side of the same equation, an investor with a short position owes stock to another person but has not actually bought them yet.”

Oftentimes, the short investor borrows the shares from a brokerage firm in a margin account to make the delivery. Then, with hopes the stock price will fall, the investor buys the shares at a lower price to pay back the dealer who loaned them. If the price doesn’t fall and keeps going up, the short seller may be subject to a margin call from his broker.”

“A margin call occurs when an investor’s account value falls below the broker’s required minimum value. The call is for the investor to deposit additional money or securities so that the margin account is brought up to the minimum maintenance margin.”

▶️ Excerpts From : https://lnkd.in/fjFNFgE

---

Identify your path to CFO success by taking our CFO Readiness Assessmentᵀᴹ.

Become a Member today and get 30% off on-demand courses and tools!

For the most up to date and relevant accounting, finance, treasury and leadership headlines all in one place subscribe to The Balanced Digest.

Follow us on Linkedin!