Flip
Broadly, the term flip can also refer to a real estate investing strategy in which the investor may acquire or control assets for a short time, add improvement of some kind to the assets, and then sell, or flip, the assets for a profit. In technical trading, an investor can flip their position from net long to net short or vice versa based on price action. An investor buys a security at what they expect is the best IPO price, whether before, at, or sometime after the actual IPO sale announcement, but when the buyer sells it depends on the kind of investment strategy and philosophy they have. In a net long, to net short flip, an investor could sell put options at various strike prices on their underlying holdings to benefit from falling prices.
What Is a Flip?
A flip generally refers to a dramatic directional change in the positioning of investments, for instance from long to short. Depending on the context or kind of investment, the word 'flip' can have different meanings. At least four different examples exist including technical trading; real-estate investment; initial public offering (IPO) investing; and professional fund management.
Understanding Flips
A flip, or reversal of one's position in the market, can be an effective way to generate profits from a new technical trend. Often, the notion of a flip is thought of as a short-term strategy, but this is not necessarily the case. Below, we look more closely at different uses of the term 'flip' in finance.
Related terms:
Capital Gains Tax
A capital gains tax is a levy on the profit that an investor gains from the sale of an investment such as stock shares. Here's how to calculate it. read more
Flipper
A flipper is an investor who buys a stock, often an IPO, in order to to sell it for a quick profit or who buys and renovates homes for quick profits. read more
Introduction to Flipping
Flipping is short-term ownership of an asset hoping to turn a quick profit. Discover more about Flipping here. read more
Global Macro Strategy
Learn more about the global macro strategy, a hedge fund strategy that bases holdings on macroeconomic principles. read more
Hedge Fund
A hedge fund is an actively managed investment pool whose managers may use risky or esoteric investment choices in search of outsized returns. read more
Initial Public Offering (IPO)
An initial public offering (IPO) refers to the process of offering shares of a private corporation to the public in a new stock issuance. read more
Negative Carry
Negative carry is a situation in which the cost of holding a security exceeds the yield earned, resulting in a loss for the investor. read more
Short Sale (Real Estate)
In real estate, a short sale is when a homeowner in financial distress sells their property for less than the amount due on the mortgage. read more
Real Estate
Real estate refers broadly to the property, land, buildings, and air rights that are above land, and the underground rights below it. Learn more about real estate. read more