Business Glossary

1. sale of a security not owned in anticipation of making a profit by purchasing the security later at a lower price, and delivering the security in completion of the short sale. The trade is completed by delivery of a borrowed certificate that is delivered to the buyer, completing the transaction at the time of the original sale. A regular way short sale occurs when the seller has no other position in the security; a short sale against the box occurs when the seller has an offsetting long position and wants to postpone tax losses until the following year. The box is securities industry jargon for securities owned by the seller, but held in safekeeping by a broker - dealer .
2. in futures, taking a market position by selling a futures contract in a financial instrument not owned by the seller, in anticipation of a price decline.

sale of a security without ownership in the hopes of a price decline that will allow repurchase at a lower price. The broker typically borrows the stock from another customer to deliver for the short sale. Those who maintain short positions are responsible for dividends and face constant threats of a price rise; they face the risk that the security can no longer be borrowed, especially for thinly traded securities.