Short Market Value

DEFINITION of 'Short Market Value'

The market value of securities sold short through an individual's brokerage account. The short market value is calculated as the security price multiplied by the number of shares sold short, multiplied by negative one. The short market value is always negative, because a short position represents an obligation to buy shares back in the future.

BREAKING DOWN 'Short Market Value'

The short market value is used in determining whether margin requirements are met for the short sale. Margin requirements for short selling are set by the broker, but are also dictated by regulatory authorities, such as the SEC in the U.S. If the short market value becomes more negative (the price of the security increases), the account holder may be required to post additional margin into the account in order to stay in the position.

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RELATED FAQS
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    In a short sale transaction, the investor borrows shares and sells them on the market in the hope that the share price will ... Read Answer >>
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    The reason that margin accounts and only margin accounts can be used to short sell stocks has to do with Regulation T, a ... Read Answer >>
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