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.

RELATED TERMS
  1. Short Covering

    Buying back borrowed securities in order to close an open short ...
  2. Short Sale

    A market transaction in which an investor sells borrowed securities ...
  3. Short Interest

    The quantity of stock shares that investors have sold short but ...
  4. Short Selling

    Short selling is the sale of a security that is not owned by ...
  5. Weak Shorts

    Traders or investors who hold a short position in a stock or ...
  6. Days To Cover

    A measurement of a company's issued shares that are currently ...
Related Articles
  1. Investing Basics

    The Basics Of Short Selling

    Short sellers enable the markets to function smoothly by providing liquidity, and also serve as a restraining influence on investors’ over-exuberance.
  2. Active Trading Fundamentals

    Short Selling: Why Short?

    Generally, the two main reasons to short are to either speculate or to hedge. When you speculate, you are watching for fluctuations in the market in order to quickly make a big profit off of ...
  3. Active Trading Fundamentals

    Short Selling: The Risks

    Now that we've introduced short selling, let's make one thing clear: shorting is risky. Actually, we'll rephrase that. Shorting is very, very risky. It's not unlike running with ...
  4. Professionals

    Market Value of a Short Position

    Market Value of a Short Position
  5. Trading Strategies

    Short Interest: What It Tells Us

    A stock’s short interest is the total number of shares that investors have sold short but have yet to close.
  6. Active Trading Fundamentals

    Short Selling: Introduction

    Have you ever been absolutely sure that a stock was going to decline and wanted to profit from its regrettable demise? Have you ever wished that you could see your portfolio increase in value ...
  7. Term

    Understanding Short Covering

    Short covering is buying back borrowed securities to close an open short position.
  8. Investing

    Short Selling Analytics

    One issue with data on short selling is that it is not real-time in nature, unlike most other market data. Most major exchanges such as the New York Stock Exchange, Nasdaq, and the Toronto Stock ...
  9. Trading Strategies

    Value Investing & Short Selling Are Like Oil & Water

    To be a good value investor, you need to find and buy bargain stocks but more importantly, you have to stick to the trade until the market recognizes the worth of these securities.
  10. Active Trading Fundamentals

    Short Selling: Conclusion

    Short selling is another technique you can add to your trading toolbox. That is, if it fits with your risk tolerance and investing style. Short selling provides a sizable opportunity with a hefty ...
RELATED FAQS
  1. What are the minimum margin requirements for a short sale account?

    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 >>
  2. Why do you need a margin account to short sell stocks?

    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 >>
  3. Can you short sell stocks that are trading below $5? My broker says that I can't.

    Short selling can be very risky for both the investor and the broker. Brokers will often tell investors that only stocks ... Read Answer >>
  4. Why does my broker allow me to enter only day orders for short selling?

    Put simply, brokerage firms restrict short sales to day orders because of the complexity of the short sale transaction and ... Read Answer >>
  5. What is the difference between a short squeeze and short covering?

    Learn about short covering and short squeezes, the difference them and what causes short squeezes. Read Answer >>
  6. What is the difference between a short position and a short sale?

    Learn how short selling and short positioning are different, specifically in regards to the nature of the commodity being ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center