The difference between earning cash flow through short-selling an asset and by entering a short futures position. Introduction: Delivery in short sale: Delivery in short sale refers to a situation where a purchase of share is done of day 1; the shares will be received 2 days afterward. Similarly, when there is a sale of a share, it has to be delivered 2 days after the transaction. In short, funds can be withdrawn on the settlement day and not on the transaction day.

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Chapter 22, Problem 3PS

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To evaluate: The difference between earning cash flow through short-selling an asset and by entering a short futures position.

Introduction:

Delivery in short sale: Delivery in short sale refers to a situation where a purchase of share is done of day 1; the shares will be received 2 days afterward. Similarly, when there is a sale of a share, it has to be delivered 2 days after the transaction. In short, funds can be withdrawn on the settlement day and not on the transaction day.

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