Occurs when a person sells stocks he or she does not yet own. Shares must be borrowed, before the sale, to make "good delivery" to the buyer. Eventually, the shares must be bought back to close out the transaction. This technique is used when an investor believes the stock price will drop. Bloomberg Financial Dictionary
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A term used to describe an open sold futures or options position. Also used to describe someone who sells a cash asset not previously owned. Contrast with long ( long position). Dresdner Kleinwort Wasserstein financial glossary
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A position showing a sale or a greater number of sales over purchases in anticipation of a fall in prices. A short position can be closed out through the purchase of an equivalent amount. Buying back from a short position is known as shortcovering. Selling into a market without a prior long position is called short-selling.
► See also Long Position.
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short position UK US noun [C] (also bear position) FINANCE, STOCK MARKET
► a situation in which someone sells shares that they have borrowed hoping that their price will fall before they buy them back and return them to their owner, making a profit: »
The market was stronger as dealers were closing short positions.
Financial and business terms. 2012.