[n. ree-beyt; v. ree-beyt, ri-beyt] 
noun, verb, -bat⋅ed, -bat⋅ing.| 1. | a return of part of the original payment for some service or merchandise; partial refund. |
| 2. | to allow as a discount. |
| 3. | to deduct (a certain amount), as from a total. |
| 4. | to return (part of an original payment): He rebated five dollars to me. |
| 5. | to provide a rebate for (merchandise) after purchase: The manufacturer is rebating this air conditioner. |
| 6. | to blunt (an edged or pointed weapon). |
| 7. | to cover the edge or point of (an edged or pointed weapon) in order to make it incapable of cutting or piercing. |
| 8. | to allow rebates, esp. as the policy or practice of a company, store, etc. |
[rab-it] noun, verb, -bet⋅ed, -bet⋅ing.| 1. | a deep notch formed in or near one edge of a board, framing timber, etc., so that something else can be fitted into it or so that a door or the like can be closed against it. |
| 2. | a broad groove let into the surface of a board or the like; dado. |
| 3. | to cut a rabbet in (a board or the like). |
| 4. | to join (boards or the like) by means of a rabbet or rabbets. |
| 5. | to join by a rabbet (usually fol. by on or over). |
rab·bet (rāb'ĭt)  (click for larger image in new window) n.
v. tr.
To be joined by a rabbet. [Middle English rabet, from Old French rabat, recess in a wall, act of beating down, from rabattre, to beat down again; see rebate1.] |
| re·bate 1 (rē'bāt') n. A deduction from an amount to be paid or a return of part of an amount given in payment. tr.v. (rē'bāt', rĭ-bāt') re·bat·ed, re·bat·ing, re·bates
[From Middle English rebaten, to deduct, from Old French rabattre, rebattre, to reduce, to beat down again : re-, re- + abbattre, to beat down; see abate.] re'bat·er n. |
| re·bate 2 (rē'bāt', rāb'ĭt) n. & v. Variant of rabbet. |
The return of part of a payment for a good. Unlike a discount, which is deducted from the price before purchase, a rebate is returned after purchase.
Rebate
1. In a short-sale transaction, the portion of interest or dividends earned by the owner (lender) of shares that are paid to the short seller (borrower) of the shares.
2. In an options transaction, the amount paid to the holder of the option if the option expires worthless.
Investopedia Commentary
1. The lender and borrower usually negotiate the rate at which the short seller will be compensated.
2. The rebate is pre-negotiated and is usually a portion of the premium paid by the option holder.
Related Links
Short Selling Tutorial
Options Basics Tutorial
See also: Kickback, Rebate Barrier Option, Short Sale, Short Selling
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