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What is the difference between a short position and a short sale?

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What is the difference between a short position and a short sale?
posted Jul 6, 2017 by Anurag Kashyap

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1 Answer

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A short position and a short sale are very similar concepts; for this reason, they are often collectively referred to as "shorting," and the two terms are quite commonly used interchangeably. The difference between the two lies in the subject of the transaction. While short selling and short positioning generally refer to the same thing both in common parlance and technical jargon, there are some instances where short positioning is not the same as short selling. A transaction undertaken by means of a derivative contract is a short position, but it is technically not a short sale because no asset is actually delivered to the buyer. Therefore, when the transactions involve futures, options and swaps, it is short positioning and not short selling.

answer Jul 6, 2017 by Pratiksha Shetty
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