Short Selling History |
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It is possible that the term "short" derives from the name of a notorious stock broker of the 1920s that used the practice to defraud his customers. It is more commonly understood that the term "short" is used because the short seller is in a deficit position with his brokerage house. That is, he owes his broker and must repay the shortage when he covers his position. Technically, the broker usually in turn has borrowed the shares from some other investor who is holding his shares long; the broker itself seldom actually purchases the shares to loan to the short seller.
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