Sale

AAA

DEFINITION of 'Sale'

1) In general, a transaction between two parties where the buyer receives goods (tangible or intangible), services and/or assets in exchange for money.

2) An agreement between a buyer and seller on the price of a security.

BREAKING DOWN 'Sale'

Every day, millions of people take part in countless sales transactions across the globe, creating a constant flow of value which forms the backbone of our economies. Sales of investment vehicles in the financial markets represent highly refined value exchanges.

For example, consider a typical middle-class person purchasing their first home. Obviously, a sale occurs when the home is sold to the buyer. However, there are many layers of sales surrounding the deal. Very likely, a lending institution would sell financing, via a mortgage, to the homebuyer. Then, the lending institution likely sells that mortgage to another individual as an investment. An investment manager could earn a living trading bundles of mortgages and other kinds of debt financing.

RELATED TERMS
  1. Barter

    The act of trading goods and services between two or more parties ...
  2. Over And Short

    An accounting term denoting a discrepancy between reported and ...
  3. Point-Of-Sale Terminal

    A type of electronic-transaction terminal. Point-of-sale terminals ...
  4. Crystallization

    The act of selling and buying stocks almost instantaneously in ...
  5. Trade

    A basic economic concept that involves multiple parties participating ...
  6. Wash Sale

    A transaction where an investor sells a losing security to claim ...
Related Articles
  1. Stock Analysis

    Who Will Win the Fitbit vs. Apple Watch Race?

    Understand the benefits and drawbacks of Fitbit's products and Apple's Watch. Learn which company is poised to take control of wearable technologies.
  2. Economics

    Economics Basics

    Learn economics principles such as the relationship of supply and demand, elasticity, utility, and more!
  3. Markets

    Understanding Economic Value Added

    Discover the simplicity of this important valuation metric. We reveal its underlying ideas and examine each of its components.
  4. Bonds & Fixed Income

    Calculating Yield to Worst

    Yield to worst is the lowest possible yield on a bond that may be called in the future.
  5. Fundamental Analysis

    Explaining the Central Limit Theorem

    Central limit theorem is a fundamental concept in probability theory.
  6. Investing Basics

    Breaking Down Optimal Capital Structure

    An optimal capital structure shows the best balance of debt to equity a company can have in order to minimize its cost of capital.
  7. Investing Basics

    What Happens in a Haircut?

    One meaning of haircut is the difference between prices at which a market maker can buy and sell a security.
  8. Investing Basics

    Explaining Delivery Versus Payment

    Delivery versus payment is a common procedure for settling the exchange of securities.
  9. Investing Basics

    What is Convertible Preferred Stock?

    Convertible preferred stock is preferred stock that can be converted into common stock as of a predetermined date at a specified ratio.
  10. Investing Basics

    What Does Clawback Mean?

    A clawback occurs when money or benefits that have been distributed are taken back because of unforeseen or unusual circumstances.
RELATED FAQS
  1. What are the advantages of having fewer distribution channels?

    The advantages of having fewer distribution channels is that a company can focus on becoming a dominant expert in a few distribution ... Read Full Answer >>
  2. What are some of the limitations of run rates?

    Some limitations of a reliance on run rates include the occurrence of one-time sales, limitations on contracts, seasonality, ... Read Full Answer >>
  3. How can a company raise its asset turnover ratio?

    The asset turnover ratio measures a company's efficiency and productivity. A company can increase a low asset turnover ratio ... Read Full Answer >>
  4. When should retailers apply the 'always be closing' (ABC) strategy?

    Retail businesses can apply the "always be closing" (ABC) sales strategy to any instance of a sales funnel, a sales cycle ... Read Full Answer >>
  5. How does the always be closing (ABC) strategy benefit a salesperson's sales funnel?

    It is good practice in sales to always be closing, because it's common for a salesperson's sales funnel to be leaky. When ... Read Full Answer >>
  6. Why is the strategy of 'always be closing' (ABC) popular in retail sales?

    For a retail salesperson to be successful, she needs to sell a lot of items because retail products traditionally have low ... Read Full Answer >>
  7. How important is sustainable growth for the long-term future of a startup?

    Sustainable growth can be defined as the maximum amount of growth a company can achieve before it needs to raise or borrow ... Read Full Answer >>
  8. How can I calculate degree of operating leverage on Excel?

    The degree of operating leverage measures how a given percent change in sales will affect a company's earnings before interest ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Depreciation

    1. A method of allocating the cost of a tangible asset over its useful life. Businesses depreciate long-term assets for both ...
  2. Recession

    A significant decline in activity across the economy, lasting longer than a few months. It is visible in industrial production, ...
  3. Bubble Theory

    A school of thought that believes that the prices of assets can temporarily rise far above their true values and that these ...
  4. Stock Market Crash

    A rapid and often unanticipated drop in stock prices. A stock market crash can be the result of major catastrophic events, ...
  5. Financial Crisis

    A situation in which the value of financial institutions or assets drops rapidly. A financial crisis is often associated ...
  6. Election Period

    The period of time during which an investor who owns an extendable or retractable bond must indicate to the issuer whether ...
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!