13UIUC%20FIN%20300%20Long%20%26%20Short%20Positions%20and%20Market%20Order%20TypesFA09

13UIUC%20FIN%20300%20Long%20%26%20Short%20Positions%20and%20Market%20Order%20TypesFA09

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Unformatted text preview: UNIVERSITY OF ILLINOIS College of Business - Department of Finance - Finance 300 (Financial Markets) Professor James Jackson Long & Short Positions and Market Order Types Long Position The investor/speculator ( S ) initiates a long position in the market at P t . The investor/speculator ( S ) initiates the long position by first buying the asset and then later selling the asset back into the market in the future. Thus, if the market price rises in the future, capital gains will be received by the investor/speculator if the market price of the asset is above P t when the investor liquidates his/her position in future time periods. The profit is equal to the difference between +P t+1 and P t . Long Position Return on Investment Opportunities Include: Capital Gains in Real Assets, Financial Assets, Interest Rate, & Foreign Exchange Markets. Short Position The investor/speculator ( S ) initiates a short position in the market at P t . The investor/speculator ( S ) initiates the short position...
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13UIUC%20FIN%20300%20Long%20%26%20Short%20Positions%20and%20Market%20Order%20TypesFA09

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