If a speculator is short and the price of the commodity rises, the individual
1. can expect a margin call
2. may take profits out of the position
3. may close the position at a loss

Question

Quizplus · Accepted Answer

When a speculator is short and the price of the commodity rises, they can indeed expect a margin call because the value of their position decreases, requiring additional funds to maintain the position. They may also choose to close the position at a loss to prevent further losses. Taking profits is not applicable in this scenario because the position is losing value, not gaining.

If a Speculator Is Short and the Price of the Commodity