ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The value of the stock itself can’t go negative. It can only become zero is the company goes bankrupt. The only case when you can see negative result is if you bought the stock and the price declined.

Detailed explanation-2: -Investors maintain “long” security positions in the expectation that the stock will rise in value in the future. The opposite of a “long” position is a “short” position. A “short” position is generally the sale of a stock you do not own. Investors who sell short believe the price of the stock will decrease in value.

Detailed explanation-3: -The Short Position is a technique used when an investor anticipates that the value of a stock will decrease in the short term, perhaps in the next few days or weeks. In a short sell transaction the investor borrows the shares of stock from the investment firm to sell to another investor.

Detailed explanation-4: -With stocks, a long position means an investor has bought and owns shares of stock. On the flip side of the same equation, an investor with a short position owes stock to another person but has not actually bought them yet.