You sell short 100 shares of Loser Co. at a market price of $45 per share. Your maximum possible loss is

Question

Quizplus · Accepted Answer

When you sell short, you borrow shares to sell them at the current price with the hope of buying them back cheaper in the future. However, if the stock price increases, you will have to buy back the shares at a higher price, leading to a loss. Since there's no limit to how high a stock's price can go, your potential loss is unlimited.

You Sell Short 100 Shares of Loser Co