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Rebate
Rebate in a short sale agreement is a dividend or portion of interest earned by the lender, which are paid to the borrower of the shares. In such agreement, the rate at which the short seller will be compensated is usually negotiated.
Rebate in an options transaction is the amount paid to the holder if the option expires worthless. The rebate in the case of options transaction is a portion of the premium paid by the option holder.
In general, rebate refers to partial refund after the purchase has been made.
| Related Terms: Kickback |