You short sell contract A at 428 and buy contract B at 333. After one month, you close contract A at 435 and contract B at 339. What is you net profit in points?
A) -13
B) -1
C) 1
D) 13

Question

Quizplus · Accepted Answer

When short selling, profit is made if the asset's price decreases after selling it. For contract A, you short sell at 428 and buy back at 435, resulting in a loss of 7 points (435 - 428). For contract B, you buy at 333 and sell at 339, making a profit of 6 points (339 - 333). The net profit is the sum of these, which is -1 point (6 - 7).

You Short Sell Contract a at 428 and Buy Contract