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. What's the main difference between watered down stock which was outlawed, and the ...

  2. How can marginal utility explain the 'diamond/water paradox'?

    Learn why a diamond is valued more highly than a bucket of water or why a professional athlete is valued more highly than ... Read Answer >>
  3. How strongly does government regulation impact the utilities sector?

    Read about the impact of government regulation on the utilities sector, particularly as is pertains to the water and electricity ... Read Answer >>
  4. If I don't qualify to refinance, what can I do to reduce my interest rates?

    I have a first and second mortgage payment with high interest rates. My house is under water. ... Read Answer >>
  5. What can cause an asset to trade above its market value?

    Learn some of the factors that can affect the price of an investment asset and the major reasons why an asset might trade ... Read Answer >>
  6. What are the effects of fracking on the environment?

    Understand what environmental concerns exist as it relates to fracking is necessary in weighing the benefits and caveats ... Read Answer >>
Related Articles
  1. ETFs & Mutual Funds

    Water-Related Investments Are Making A Splash

    There’s no doubt about it. The world is facing a water crisis. However, for forward thinking investors, that could mean a huge opportunity.
  2. Managing Wealth

    Risks to Consider When Investing in Water

    Investing in water should be a lock. But water is volatile and could see as many risks as potential rewards.
  3. Markets

    In Focus: Water Scarcity

    After a discussion, sponsored by CDP, we share the importance of water disclosure as it relates to businesses operating amid increasing water scarcity.
  4. Markets

    5 Water Stocks To Tap Into

    An increase in population and pollution has made water a fragile resource.
  5. Markets

    Is Water The Next Big Commodity?

    An increase in both population and pollution has made water a very fragile and important resource. Learn the key players.
  6. Investing

    Water Scarcity: A Global Mega-Trend Worth Investing In

    Although the Earth has more water than land, only 1% of the vital liquid is actually potable. Across the globe, limited supplies of clean water are in danger as demand surges. The only solution: ...
  7. Markets

    With Fracking It’s All About Water Management

    It takes an awfully large amount of water to frack an oil and gas well these days. Given the growth projections for production activity in the U.S. and Canada, water management could be one of ...
  8. Investing

    Should Water Be Privatized?

    Could water privatization mean lower costs, greater efficiency and higher quality compared to public sector providers? A look at the evidence so far.
  9. ETFs & Mutual Funds

    Quenching A Thirst With Desalination Plays

    As our planet's population continues to expand at its rapid pace, more pressure is being placed on our water resources.
  10. Investing

    WaterSense: Saving Water And Money

    With a few simple updates, you could be saving on your annual water expenses.
RELATED TERMS
  1. Above Water

    1. Refers to the condition of a company's asset when its actual ...
  2. Produced Water

    Waste water generated during the production of oil and natural ...
  3. Water Quality Improvement Act Of 1970

    Legislation that expanded the federal government's authority ...
  4. Palisades Water Index

    A stock market index that gauges the performance of global water ...
  5. Watered Stock

    Stock that is issued with a value much greater than the value ...
  6. Water Damage Legal Liability Insurance

    A policy that provides financial protection to a person or business ...
Hot Definitions
  1. Glass-Steagall Act

    An act the U.S. Congress passed in 1933 as the Banking Act, which prohibited commercial banks from participating in the investment ...
  2. Quantitative Trading

    Trading strategies based on quantitative analysis which rely on mathematical computations and number crunching to identify ...
  3. Bond Ladder

    A portfolio of fixed-income securities in which each security has a significantly different maturity date. The purpose of ...
  4. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  5. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  6. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
Trading Center