You short sell 500 shares of stock at $24 a share. One month later, you covered the short at a price of $25. What was your total dollar return on this investment? Ignore margin interest, trading costs and taxes.

Question

Quizplus · Accepted Answer

When you short sell, you profit if the stock price goes down. In this case, you sold at $24 and bought back at $25, meaning you lost $1 per share. For 500 shares, that's a $500 loss.

You Short Sell 500 Shares of Stock at $24 a Share