Wait so is the timeframe on a short always one week? Also, is the short, as a "financial instrument", supposed to facilitate any real, useful function, or is it a construct used exclusively to gamble with?
In practice, the short seller will borrow the stock in exchange for some small amount of interest, sell that stock, and as long as they keep paying the interest they might take a long time to buy the stock back and return it. The lender can usually request the stock back at short notice, however.
Shorts are part of a complicated web of financial instruments that are supposed to a) stabilise stock prices, in the sense that they keep stock prices close to the 'real' value of the stock, and b) allow traders with better market knowledge to make money at the expense of traders with worse market knowledge. They're 'useful' in that sense.
Wait so is the timeframe on a short always one week? Also, is the short, as a "financial instrument", supposed to facilitate any real, useful function, or is it a construct used exclusively to gamble with?
In practice, the short seller will borrow the stock in exchange for some small amount of interest, sell that stock, and as long as they keep paying the interest they might take a long time to buy the stock back and return it. The lender can usually request the stock back at short notice, however.
Shorts are part of a complicated web of financial instruments that are supposed to a) stabilise stock prices, in the sense that they keep stock prices close to the 'real' value of the stock, and b) allow traders with better market knowledge to make money at the expense of traders with worse market knowledge. They're 'useful' in that sense.