Glossary/ Market mechanics
Market mechanics
Short
A position that profits if the price falls.
Where this comes up
Lessons that use the term in context, which is usually more useful than the definition on its own.
- The failed breakout — Closes, not wicks — and the difference between a poke and a break.
- Vertical spreads — Capping both ends on purpose, and what it costs.
- Expiry day mechanics — Settlement, exercise and what actually happens at the close.
- Risk of ruin — The probability nobody calculates before they need it.