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#1




Forward Question Short Stock Position
From ASM:
Shorting stock position is same as shorting forward and then buying the zerocoupon bond that part I understood. What I don't get is what does it mean by "moving the bond to the other side of the equation to put selling a stock on one side"? And why are we shorting zerocoupon bond, aren't we buying and holding it to cover for short stock/forward?
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#2




You can view this as follows, where + represents long position and  represents short position. Thus, we can express "a short forward is equal to short stock plus a long bond" as:
F = S + B Now, if we move "+B" to the other side of the equation, we have: F  B = S Note that the sign associated with B is now negative. Since we define a negative sign to represent a short position, we now have short stock. So, we can interpret the resulting equation above as "short forward and short bond is equal to short stock". Last edited by tkt; 11032019 at 03:53 PM.. 
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