Advantages And Disadvantages Of Short Sale

Short sale Short sale is a sale of securities in which investors does not own the securities, they simply borrow the securities, usually from the broker in expectation that the securities price will decline and allow them to make profit by buy back the securities at a lower price. Short selling often used by investors to either hedge or speculate and can be classified as speculative activity. The benefit of short sale is that it allows investors to add value to their portfolio even when there’s a bear market since it can be difficult to make profit in a bear market without short sale and if investors use short sale to hedge, they can minimize their portfolio risk. The downfall of short sale is that the loss can be limitless if the price of the securities rise instead of fall and investors has to buy back the securities at a higher price.

Merger and Acquisition
Mergers and acquisition is a process in which a company or an acquiring company buy target company. More specifically, there are 3 types of mergers. The first one is Horizontal mergers which is when the company acquires another company in the same industry to gain more complete product line or even realized economies of scale. The second one is a vertical merger, an example for this merger is when manufacturer merge with their supplier to cut cost and realized a higher profit. The last one is conglomerate mergers which can be described as two company that has unrelated business merge together to diversify the