Can anyone tell me what is meant by “the cash from the short sale” in the context of equitizing a long-short portfolio? It is also called a “cash rebate”. I am probably being stupid but what is this cash flow a result of? Many thanks!!
when you short a stock you are essentially selling the shares. cash inflow. best explained through an example perhaps. CAB trades at $10/share. you short 200 shares (aka sell 200)…the cash you get from the short sale is 10*200 = $2000. Havning not read this LOS i suspect when it refers to equitizing a long-short it means the cash inflow from the short is used to offset the cash outflow from taking a long position in another stock. I don’t know what you mean by ‘cash rebate’…
Thank you! I don’t know where I got cash rebate from to be honest - I meant short rebate. Makes sense now… Cheers!