With security-borrow acts it around a contract with that the owner its securities to a dealer borrows itself, with the condition that it gets papers back of same kind and quality at expiration of the fixed period again. The dealer can fulfill at run time own borrowing obligations (e.g. cover of an existing Short position) with these securities. For borrow has it a fee to pay.

With one security-borrow acts it to the kind of nature after around a credit in securities. The borrower of securities is in principle opposite the creditor obligated not only to the return of the same papers, but he has only papers of same kind and quality to reset and besides escaped return payments from the securities to refund.

Under the term security-borrow (in the broader sense) different business types are summarized:

• Loan against securities (security-borrow in the closer sense),
• genuine security pension business (Repurchase Agreements, Repos),
• Sell Buy baking transactions and false security pension business.

These differ on the one hand in the legal arrangement, on the other hand in the actually taking place money and security rivers.

Loans against securities are entered in connection with for speculative purposes and with delivery difficulties.

The remainder of this article describes the execution of :

The speculation on falling security prices sets usually one security-borrows ahead and with the term Leerverkauf is occupied. The empty salesman speculates on falling courses, by selling securities, which he does not possess, in hope, her to deeper courses (back) to buy later to be able.

The financial result of each securities trading exists in principle in the difference between buying rate and selling rate of a financial title, corrected around broker fees, net interest expenditure and other commercial costs. The sequence, in which purchases and sales in the stock markets take place, plays therefore for the economic result of a security transaction obviously no role, can however for the buchhalterische view be relevant.

For the execution of a Leerverkaufs that is necessary check-out counters of the appropriate security certificates of an investor, who holds the papers in its existence. For the lender the sense of the thing lies in the fact that it gains an auxiliary yield for the securities in its possession by the received

are subject to various regulations. First for this a separate Margin account is necessary. The moreover one ith general one in such a way specified applies "UP-ticks" - for rule with of shares of quoted corporations. According to the regulations "UP-tick" - rule may be empty-sold a share only if the sales directly in the connection on a risen ("UP-tick") or an unchanged share quotation effected ("zero plus tick"). Beyond that restrictions often exist with new eating ions (IPOs) and for the Leerverkauf of those shares, which fall below a certain given minimum rate.

Apart from the pure speculation on falling stock exchange courses application find with the index arbitrage with share indices and with Hedgefonds so mentioned.

Articles in category "Security-borrow"

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