Short Sale Against the Box Securities Law and Legal Definition

This is a short sale of a security by a seller who owns enough shares of the security for covering up the sale but s/he anyway borrows shares because the seller wants to keep ownership a secret or because the owned shares are not easily accessible. Delivery may be made either with the borrowed shares or with the owned shares. Therefore, it is not risky as an ordinary short sale. The phrase against the box refers to the owned shares that are in safekeeping. Earlier, the “box” was used as a container to store stock certificates.