Chapter 02 · Section 2.1

Short DM

Suppose you hear the following statement: "Victor is short 250,000 March Deutsche Marks" This statement means that:

a) Victor has bought DM 250,000 more than he has sold for delivery in March.
No. The word "short" illustrates liability. If Victor has bought more Deutsche Marks than he has sold, he does not have a net liability and therefore is not short.
b) Victor has sold DM 250,000 more than he has bought for delivery in March.
c) Victor lost DM 250,000 in March.