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SHORT SELLING: THE MUTUAL FUND ALTERNATIVE
Author(s) -
Eckardt Walter L,
Bagamery Bruce D.
Publication year - 1983
Publication title -
journal of financial research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.319
H-Index - 49
eISSN - 1475-6803
pISSN - 0270-2592
DOI - 10.1111/j.1475-6803.1983.tb00332.x
Subject(s) - exploit , hedge fund , futures contract , mutual fund , alternative investment , position (finance) , business , economics , financial economics , finance , computer science , market liquidity , computer security
Short selling allows investors to shape prospective investment return opportunities along desired lines, offers the ability to hedge factors such as unanticipated inflation, provides a means to exploit perceived return anomalies, and facilitates the equilibrium pricing of securities. Currently, a short position can be created directly, with options, or with futures contracts. Each procedure has some advantages and some drawbacks with respect to the others. The alternative of mutual fund short selling in the family of funds framework neither dominates nor is dominated by existing methods. Implementation would, therefore, augment investor welfare.