blankning
Blankning is a term used in financial markets to describe the practice of taking a short position in a security by selling securities that the seller does not currently own, typically by borrowing them through a broker. The seller aims to profit from a decline in the security’s price by buying back the shares later at a lower price and returning them to the lender. The difference between the sale price and the cover price represents the profit or loss, adjusted for borrowing costs and any dividends or corporate actions incurred during the position.
There are two main forms. Covered blankning involves borrowing or otherwise securing the shares before or at
Mechanics and obligations: after selling short, the trader may owe dividends to the lender and typically incurs
Regulation and market effects: jurisdictions regulate short selling to preserve market integrity, often requiring disclosures of
See also: short selling, naked short selling, short squeeze.