You short sold 500 shares of Jasper stock at $41 a share at an initial margin of 60%. What is the highest the stock price can go before you receive a margin call if the maintenance margin is 40%.?

Question

Quizplus · Accepted Answer

The highest the stock price can go before you receive a margin call is $46.86. This is because the maintenance margin is 40%, which means that you must maintain a minimum equity of 40% of the value of the stock. If the stock price goes above $46.86, your equity will fall below 40% and you will receive a margin call.

You Short Sold 500 Shares of Jasper Stock at $41