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

Question

Quizplus · Accepted Answer

Proceeds from sale = $21,400
Initial margin deposit = $21,400 × 0.60 = $12,840
Short position = 1,000 × $27.50 = $27,500
Account equity = $21,400 + $12,840 - $27,500 = $6,740
Margin position = $6,740 / $27,500 = 24.51 percent

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