You short sold 600 shares of a stock at $52 a share. The initial margin requirement is 75% and the maintenance margin is 35%. What is the amount of your total liability for this transaction as initially shown on your account balance sheet?

Question

Quizplus · Accepted Answer

The total liability for the transaction is calculated by multiplying the number of shares short sold by the price per share, which is 600 shares * $52 = $31,200. This represents the total value of the stock that was sold short and must be repaid to close the position, regardless of the margin requirements.

You Short Sold 600 Shares of a Stock at $52