Short Market Value

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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
  1. How does somebody make money short selling?

    Short selling is a fairly simple concept: you borrow a stock, sell the stock and then buy the stock back to return it to ... Read Full Answer >>
  2. What is a margin account?

    A margin account is an account offered by brokerages that allows investors to borrow money to buy securities. An investor ... Read Full Answer >>
  3. How do futures contracts roll over?

    Traders roll over futures contracts to switch from the front month contract that is close to expiration to another contract ... Read Full Answer >>
  4. Why do companies enter into futures contracts?

    Different types of companies may enter into futures contracts for different purposes. The most common reason is to hedge ... Read Full Answer >>
  5. What does a futures contract cost?

    The value of a futures contract is derived from the cash value of the underlying asset. While a futures contract may have ... Read Full Answer >>
  6. How does a broker decide which customers are eligible to open a margin account?

    Brokers have the sole discretion to determine which customers may open margin accounts with them, although there are regulations ... Read Full Answer >>

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