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 is "marginalism" in microeconomics and why is it important?

    Find out what economists mean by marginal utility or cost and why marginalism is such an important concept in microeconomic ... Read Answer >>
  2. How can particular scarcities benefit specific stocks?

    Learn about scarce resources, such as crude oil and water. Explore how companies that produce these resources have benefited ... Read Answer >>
  3. 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 >>
  4. 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 >>
  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. Investing

    Water: The Ultimate Commodity

    Opportunities to invest in this scarce resource are flowing freely - dive in!
  2. Investing

    The Economic Effects of Water Shortages

    Raising water prices to dampen demand is a necessary approach to solving the world's water shortage.
  3. Investing

    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.
  4. Investing

    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.
  5. Investing

    5 Water Stocks To Tap Into

    An increase in population and pollution has made water a fragile resource.
  6. Investing

    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.
  7. Investing

    Looking for Cost-Effective Ways to Save Water?

    There are lots of things you can do to save water at home while reducing your ecological footprint at the same time. Here are five simple ways to do it.
  8. Investing

    Global Water Resources Trades Ex-Dividend Thursday (GWRS)

    Global Water will send its dividend payment on Oct. 31 to shareholders of record as of Oct. 17.
  9. Investing

    This ETF Offers New Way to Invest in Water (WTRX)

    A new ETF tracking water has entered the investing landscape.
  10. 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.
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 ETF

    An exchange-traded fund that invests in companies operating in ...
  4. Water Quality Improvement Act Of 1970

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

    A stock market index that gauges the performance of global water ...
  6. Water Damage Legal Liability Insurance

    A policy that provides financial protection to a person or business ...
Hot Definitions
  1. Conflict Theory

    A theory propounded by Karl Marx that claims society is in a state of perpetual conflict due to competition for limited resources. ...
  2. Inflation-Linked Savings Bonds (I Bonds)

    U.S. government-issued debt securities similar to regular savings bonds, except they offer an investor inflationary protection, ...
  3. Peak Globalization

    Peak globalization is a theoretical point at which the trend towards more integrated world economies reverses or halts.
  4. Phishing

    A method of identity theft carried out through the creation of a website that seems to represent a legitimate company. The ...
  5. Insurance

    A contract (policy) in which an individual or entity receives financial protection or reimbursement against losses from an ...
  6. Earnings Per Share - EPS

    The portion of a company's profit allocated to each outstanding share of common stock. Earnings per share serves as an indicator ...
Trading Center