Short Market Value

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Short Selling

    The sale of a security that is not owned by the seller, or that ...
  2. Margin Account

    A brokerage account in which the broker lends the customer cash ...
  3. Short Sale

    A market transaction in which an investor sells borrowed securities ...
  4. Short-Sale Rule

    A Securities and Exchange Commission (SEC) trading regulation ...
  5. Credit Balance

    In a margin account, the amount of funds deposited in the customer's ...
  6. Cash-And-Carry Trade

    A trading strategy in which an investor buys a long position ...
Related Articles
  1. What is a margin account?
    Trading Strategies

    What is a margin account?

  2. How does somebody make money short selling?
    Options & Futures

    How does somebody make money short selling?

  3. Margin Trading
    Options & Futures

    Margin Trading

  4. Short Selling Tutorial
    Active Trading Fundamentals

    Short Selling Tutorial

comments powered by Disqus
Hot Definitions
  1. Walras' Law

    An economics law that suggests that the existence of excess supply in one market must be matched by excess demand in another ...
  2. Market Segmentation

    A marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will ...
  3. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following: ...
  4. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  5. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  6. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
Trading Center