Take the 2-minute tour ×
Quantitative Finance Stack Exchange is a question and answer site for finance professionals and academics. It's 100% free, no registration required.

What is shorting a asset that has negative price. Can anyone give me an example?

share|improve this question

closed as off-topic by Matt Wolf, Bob Jansen, lehalle, olaker May 4 at 8:03

This question appears to be off-topic. The users who voted to close gave this specific reason:

  • "Basic financial questions are off-topic as they are assumed to be common knowledge for those studying or working in the field of quantitative finance." – Matt Wolf, Bob Jansen, olaker
If this question can be reworded to fit the rules in the help center, please edit the question.

1  
Can you give an example of an asset with negative price? –  SRKX Apr 2 at 8:49

1 Answer 1

Three examples would be spreads, butterflies, and double-butterflies. They can all have negative prices. Reverse the sign of the quantity on all the legs and you're short the synthetic.

For example, the Jan-Feb calendar spread would buy 1 Jan and sell 1 Feb contract. If you wanted to be short the spread, you would sell 1 Jan and buy 1 Feb contract.

share|improve this answer

Not the answer you're looking for? Browse other questions tagged or ask your own question.