An investor who short sells a stock will receive a margin call if the price of the stock decreases substantially.

Question

Quizplus · Accepted Answer

An investor who short sells a stock will receive a margin call if the price of the stock increases substantially. This is because short selling involves borrowing shares from a broker and selling them with the hope of buying them back at a lower price in the future. If the price of the stock rises, the investor is facing potential losses, and the broker may require additional funds to cover the potential loss.

An Investor Who Short Sells a Stock Will Receive a Margin