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LSDefine
Simple English definitions for legal terms
short
Read a random definition: aemulatio vicini
A quick definition of short:
Short means that someone is selling something they don't actually own, hoping that the price will go down so they can buy it back at a lower price and make a profit. It's the opposite of long, which means buying something with the hope that the price will go up.
A more thorough explanation:
Definition: Short is an adjective used in finance to describe a situation where a trader sells a security or commodity that they do not currently own, in the hope that the price will fall. This is known as a short sale.
Example 1: A trader believes that the price of Company X's stock is going to decrease, so they sell the stock without actually owning it. This is a short sale.
Example 2: An investor sells a futures contract for gold, even though they do not currently own any gold. This is also a short sale.
Both examples illustrate the definition of short, as they involve selling something that the trader or investor does not currently own. This is done in the hope of making a profit if the price of the security or commodity falls.