You short-sell 200 shares of Rock Creek Fly Fishing Co., now selling for $50 per share. If you want to limit your loss to $2,500, you should place a stop-buy order at ________.

Name: You short-sell 200 shares of Rock Creek Fly Fishing Co., now selling for $50 per share. If you want to limit your loss to $2,500, you should place a stop-buy order at ________.
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Question

Quizplus · Accepted Answer

Amount received from short sale = 200 × $50 = $10,000
Loss = $2,500 = 200P - 10,000
$12,500 = 200P, so P = $62.50

You Short-Sell 200 Shares of Rock Creek Fly Fishing Co