You short-sell 200 shares of Tuckerton Trading Co., now selling for $50 per share. What is your maximum possible gain, ignoring transaction costs?

Name: You short-sell 200 shares of Tuckerton Trading Co., now selling for $50 per share. What is your maximum possible gain, ignoring transaction costs?
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The maximum possible gain from short-selling is when the stock price drops to $0. In this case, you would gain the full amount of the initial sale, which is 200 shares x $50 = $10,000.

You Short-Sell 200 Shares of Tuckerton Trading Co