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| Subject: short selling In finance, short selling (also known as shorting or going short) is the practice of selling assets, usually securities, that have been borrowed from a third party (usually a broker) with the intention of buying identical assets back at a later date to return to the lender. The short seller hopes to profit from a decline in the price of the assets between the sale and the repurchase, as he will pay less to buy the assets than he received on selling them. Conversely, the short seller will incur a loss if the price of the assets rises. Other costs of shorting may include a fee for borrowing the assets and payment of any dividends paid on the borrowed assets. Shorting and going short also refer to entering into any derivative or other contract under which the investor profits from a fall in the value of an asset. Stock buyback paradox By John Schroy, on August 7th, 2006 |  Leave a comment  With prices falling after the market peaked in 2000 and with massive net sales of stocks indicated by the Federal Reserve flow of funds accounts, how can the percentage of assets represented by stocks still be about the same as in 1995? The apparent paradox of selling without reducing holdings can be explained by two common operations described in this article. August 7th, 2006 | Print Article |  Email Article |  Topics: executive stock options, short selling, Stock Buybacks | Category: Stock Buybacks | Leave a comment |  Short urlThe Buyback Era By John Schroy, on March 21st, 2006 | Leave a comment  The Federal Reserve national flow of funds accounts show that over the last five years, net sales of corporate equities by US households proceeded faster than corporations could match with buyback programs. The relative size and correlation between household stock sales and corporate equity buybacks indicates that most liquidations by individuals are related to executive option programs. From 2001 to 2005, net equity sales by households totaled $1,156 billion, which suggests that corporate profits transferred to option holders in half a decade may have been on the order of one trillion dollars. March 21st, 2006 | Print Article | Email Article | Topics: Corporate Governance, executive stock options, hedge funds, pension plans, short selling, Stock Buybacks | Category: Stock Buybacks | Leave a comment | Short urlLiquidity preference 2005 By John Schroy, on March 12th, 2006 | Leave a comment  For the first year since 2001, investors moved back into money market mutual funds in 2005, with net sales of $127 billion. The return of investors to money market funds was clearly the result of the Federal Reserve policy of increasing short-term interest rates, combined with the flattening of the yield curve due to buying pressure on longer-term fixed income securities resulting from the trade deficit. March 12th, 2006 | Print Article | Email Article | Topics: Federal Reserve Bank, Funding corporations, Interest Rates, money market funds, short selling | Category: Debt | Leave a comment | Short urlFeatured articles on inside pages
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