What does it mean to be "above water"?

By Justin Bynum AAA
A:

The term "above water" is used to describe any situation in which the ending or current value of a subject is higher than its beginning or opening price.

In accounting, an asset with a value that has appreciated is said to be "above water" because the price at which it could be sold exceeds the price paid. In financial markets, the stock market is said to have stayed "above water" when it finishes higher than its previous close. In personal investing, one's trading positions are said to be "above water" when values remain above the price at which they were bought or when values fall below the price at which they were sold short. Finally, a company that remains financially viable occasionally may be referred to as being "above water".

Similarly, an asset, index or security is said to be "treading water" when its worth equals the approximate purchase price. Furthermore, an asset, index or security is said to be "below water" when its worth falls below the purchase price.

To read more on this subject, see The Hidden Value Of Intangibles.

This question was answered by Justin Bynum.

RELATED FAQS

  1. How do intangible assets appear on a balance sheet?

    Understand how various types of intangible assets are handled in a company's accounting and which of them you can find on ...
  2. How do you trade put options on E*TRADE?

    Learn all about put option trading at E*TRADE. Explore margin accounts and become familiar with the different types of option ...
  3. How do you trade put options on Ameritrade?

    Learn about option trading with TD Ameritrade. Explore the different types of options and their possible impacts on the investors ...
  4. Are put options more difficult to trade than call options?

    Learn about the difficulty of trading both call and put options. Explore how put options earn profits with underlying assets ...
RELATED TERMS
  1. Earned Premium

    The amount of total premiums collected by an insurance company ...
  2. Market Value

    The price an asset would fetch in the marketplace. Market value ...
  3. Insurance Regulatory Information System (IRIS)

    A collection of databases and tools used to analyze the financial ...
  4. Book Value Reduction

    Reducing the value at which an asset is carried on the books ...
  5. Deferred Tax Asset

    A deferred tax asset is an asset on a company's balance sheet ...
  6. Bulldog Market

    A nickname for the foreign bond market of the United Kingdom. ...

You May Also Like

Related Articles
  1. Investing Basics

    How To Calculate Goodwill

  2. Economics

    An Introduction to Government Loans

  3. Bonds & Fixed Income

    Spotting A Market Bottom

  4. Markets

    Material Adverse Effect A Warning Sign ...

  5. Investing Basics

    SEC Filings: Forms You Need To Know

Trading Center