Recently, you sold 1,000 shares of stock for $21,400. The sale was a short sale with an initial margin requirement of 60%. The maintenance margin is 30%. The stock is currently trading at $27.50 a share. What is your current margin position in this stock?

Question

Quizplus · Accepted Answer

The initial margin was 60% of $21,400, which is $12,840. The stock is now worth $27,500 (1,000 shares * $27.50). The equity in the account is the initial margin plus the difference between the sale price and the current price: $12,840 + ($21,400 - $27,500) = $6,740. The margin position is equity divided by the current value of the stock: $6,740 / $27,500 = 24.51%.

Recently, You Sold 1,000 Shares of Stock for $21,400