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 are some examples of general and administrative expenses?

    Learn examples of the general and administrative expenses such as audit fees, legal fees, rent, utilities and office equipment ...
  2. Why would a corporation issue convertible bonds?

    Discover how corporations issue convertible bonds to take advantage of much lower interest rates as a result of a conversion ...
  3. How often should a small business owner go through a bank reconciliation process?

    Learn about the bank reconciliation process, its purpose and how often it is recommended that small businesses perform a ...
  4. What is the difference between recurring and non-recurring general and administrative ...

    Understand the expenses involved in a company's general and administrative operating costs and the difference between recurring ...
RELATED TERMS
  1. Capitalized Cost

    An expense that is added to the cost basis of a fixed asset on ...
  2. Long-Term Debt

    Long-term debt consists of loans and financial obligations lasting ...
  3. Chart Of Accounts

    A listing of each account a company owns, along with the account ...
  4. Convention Statement

    A document filed by an insurance or reinsurance company that ...
  5. Enterprise Value (EV)

    A measure of a company's value, often used as an alternative ...
  6. Earned Premium

    The amount of total premiums collected by an insurance company ...

You May Also Like

Related Articles
  1. Fundamental Analysis

    Making Sense of Netflix's Balance Sheet

  2. Term

    Long-Term Debt

  3. Investing

    How Nasdaq Makes Money

  4. Investing

    How The NYSE Makes Money

  5. Fundamental Analysis

    What are some examples of Cash Flow ...

Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!