You short sold 200 shares of ABC stock at $56 a share at initial margin of 50%. What is the highest the stock price can go before you receive a margin call if the maintenance margin is 35%?

Question

Quizplus · Accepted Answer

The highest stock price before a margin call can be calculated using the formula: P = (Initial Price * (1 + Initial Margin)) / (1 + Maintenance Margin). Here, P = (56 * 1.5) / 1.35 = $62.22.

You Short Sold 200 Shares of ABC Stock at $56